Cement and other building materials may not be the sexiest subject, but analysts on Wall Street are still showing the industry some love. In fact, Cemex (NYSE:CX), one of the largest building materials companies in the world, received a new price target today. So with CX stock climbing 10%, what else do you need to know?
To start, investors should know that Cemex is seriously a big player in the building materials world. Although it headquarters its operations in Mexico, it also does business in the United States, Europe, the Middle East and Africa. But what exactly does it do? Well, Cemex specializes in cement, aggregates and neogem, a high-performance material line. This means the company is squarely in the realm of infrastructure stocks.
Importantly, this is likely why CX stock is getting some love. Today, UBS analyst Alberto Valerio raised his 12-month price target from $4.50 to $5.70. Based on its opening price from Dec. 1, that implies more than 20% upside for Cemex.
Additionally, BBVA Bancomer analyst Francisco Martinez also jumped on the Cemex bandwagon yesterday, raising his target to $5.30. Clearly, there is something special about this leading building materials player.
CX Stock and the Infrastructure Play
That something special may just be President-elect Joe Biden. Investors likely are aware that infrastructure stocks have been captivating attention over the last several months. This is because, leading up to Election Day, they were some of the most volatility-proof equities. Essentially, investors believed that whether President Donald Trump or Biden won, infrastructure would benefit.
So far, this has played out. While Trump has spoken out in favor of a major infrastructure plan, Biden has also promised to help rebuild America. Such a plan makes a lot of sense. It would provide jobs for unemployed individuals, and also help create a better infrastructure in terms of roads and bridges. Additionally, many investors believe that Biden will extend his plan to 5G infrastructure and all things electric. The Democrat has promised to expand the electric vehicle charging station footprint, and could perhaps do the same for hydrogen charging stations.
Importantly, infrastructure experts also believe that even with a divided Congress, Biden will find success pursuing these initiatives. Why? Many lawmakers feel that infrastructure is a bipartisan effort. Voters across the board should appreciate things like improved transportation.
How should you play CX stock right now? Leading up to the January 2021 inauguration, a lot of attention will likely remain on infrastructure and other presidential initiatives. Keep an eye out for more details on where Biden plans to focus, and do your own due diligence with Cemex. For now though, CM stock has a bit of that Wall Street sparkle.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer for InvestorPlace.com.