Ternium (TX) 2Q26 Solid Beat

Equity Research 4 August 2026 | 8:47PM BRT

Ternium (TX): 2Q26 Solid Beat; Strong Momentum To Continue

Ternium’s 2Q26 EBITDA of $717M (+50% q/q, 78% y/y) beat GSe/VA Consensus by Marcio Farid | 18%/14% (lower costs and hence better margins). TX guided for sequentially higher Goldman Sachs do Brasil CTVM S.A. 3Q26 EBITDA (better volumes + margin expansion). Today’s earnings poses at least Emerson Vieira 7% upside to GS 2026 EBITDA. We expect a positive market reaction. | Goldman Sachs do Brasil CTVM S.A. Ternium’s Mexico operations should start benefiting from incremental volumes due Henrique Marques to the new pipeline of infrastructure projects (PEMEX, CFE, etc) already in 3Q26 (vs | mgmt’s prior expectation of year-end), while the continuation of substitution of Goldman Sachs do Brasil CTVM S.A. Asian steel imports (trade restrictions implemented by Mexico’s government since mid-2025) and demand recovery (normalization of inventories on commercial customers) point to sustained higher volumes (link, link).

In Argentina, earnings were in line (higher volumes offset by lower realized prices and higher costs) and forward volume trends are mixed, while Brazil’s Usiminas had previously reported in-line 2Q26 earnings, but with more price hikes needed in 2H26 to become more constructive.

Following a challenging 2025 (weak demand and pricing due to US section 232), TX’s earnings momentum should remain strong, supported by better supply/demand outlook in Mexico (trade barriers, inventories normalization and improving infra demand) and the ramp up of Pesqueria upstream and downstream production (supporting higher volumes and better costs). Mexico HRC prices are up by 30% YTD but still with a significant gap to US benchmark (vs. historically 10% premium). So we see further upside once/if S232 tariffs are lifted.

We reiterate our Buy with TX trading at 16-20% FCFy in 2027-28 and 3.9-3.3x EV/EBITDA.

n Management outlook: sequentially stronger EBITDA in 3Q26 on higher volumes and margin expansion (higher realized prices to more than offset cost pressure). In Mexico, volumes should increase q/q as recovery trends continue and the company now sees incremental volumes being added from the new pipeline of infrastructure projects (e.g. PEMEX, CFE with investments in renewables), which seem to be benefiting TX earlier-than anticipated (in 1Q26 conf call, management expected incremental tons due to infra projects to have an impact by year-end only). On top of that, the company continues to see substitution of Asian imported steel at OEMs, following Mexico government’s several trade protective measures applied since 2025. In Argentina, the demand

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outlook is mixed with some pockets of strength (energy, mining, agricultural), but manufacturing remains weak and construction recovers from low levels. In Brazil, Usiminas’ reported outlook is for stable recurring earnings on steel and weaker earnings at the iron ore business (details here). VA Consensus 3Q26 EBITDA is at $692M, suggesting upside earnings revision ahead. n What to watch for during earnings call: Ternium will host its earnings call on August 5, at 8:00am EST. We will be looking for more details on: a) Demand recovery outlook in Mexico and competitive outlook from traded imports as well as upside from ongoing progress at infrastructure projects, b) steel price dynamics across TX’s regions, mainly in Mexico; c) further details on capital allocation/dividend payments going forward; and e) growth/investment outlook for Argentina, f) cost outlook.

Exhibit 1: Ternium 2Q26 earnings summary Ternium 2Q26E GSe chg (%) 1Q26 QoQ% 2Q25 YoY% Consensus chg (%) Mexico TX Mexico steel…