ADRs in Focus: Cemex declines as JPMorgan cuts

U.S.-traded shares of Cemex SA de CV declined on Thursday after a JPMorgan analyst predicted weaker demand for building materials in the U.S. and downgraded the Mexico-based company to "Neutral" from "Overweight."

American Depositary Receipts of Cemex fell $1.07, or 3.6 percent, to close at $28.73.

In a note to investors, analyst Mike Betts said demand for cement and aggregates is declining in several U.S. states where Cemex has a large presence. That places the company in a particularly weak position considering some two-thirds of Cemex's EBITDA _ or earnings before interest, taxes depreciation and amortization costs _ derive from cement and aggregates.

In addition, Betts said he expects U.S. demand for non-housing and highway work to continue to decline through 2009. According to Betts' estimates, the U.S. generates about 26 percent of Cemex's EBITDA.

Last month, Cemex said it expected the U.S. residential housing market to continue to decline in 2008, but at a slower pace than last year.

Betts maintained his $39 price target, implying an expected gain of 31 percent in the next year.

The broader ADR market was lower Thursday as U.S. markets advanced. The Bank of New York Latin America ADR Index fell 6.88 points, or 1.4 percent, to 496.38.

The Bank of New York Composite ADR Index slipped 1.10 points to 181.92.

ADRs, or American depositary receipts, are securities designed to allow U.S. investors to trade shares of companies based overseas.