Weak outlook for urban developers
Monterrey, Mexico.- After weak financial results reported for the second quarter by urban developers in Mexico, the industry will most likely have a negative performance in coming quarters, Barclays Capital estimates in a report.
Barclays Capital said that generating free cash flow is one of the main objectives to be reached by these companies, which are struggling to fulfill new government regulations on standards to sell homes with a subsidy.
Barclays cut down their target price for Homex shares from MXP$54 to MXP$33, while for Geo it went from MXP$21 to MXP$19. For Urbi they are forecasting MXP$12 per share, compared to previous estimates of MXP$27. For ARA, Barclays Capital considers the price per share in the next 12 months will be MXP$5.
Barclays Capital said that political uncertainty and unwillingness to support developers will be the main factors for the negative outlook.
Source: El Norte | Date: 07/08/2012