Alpek (ALPEKA.MX) Increasing TP to P$18.0/share on strong earnings momentum

Citi reiterates its Buy rating on Alpek (ALPEKA.MX) and raises its target price to P$18.0/share from P$16.0/share, implying 12.4% expected share price return, an 8.1% dividend yield and 20.5% expected total return. Alpek posted a 10% beat to consensus comparable EBITDA and introduced new guidance 12% ahead of consensus. Citi raises its 2026E recurring EBITDA forecast to $991m, in line with the new guidance, and its 2027E EBITDA to $803m from $722m, as the ongoing Mideast conflict and higher oil prices and freight costs may help lock better margins into 2027 contracted (~60%) volumes, typically negotiated between end-November and early December. The stock trades at 3.9x-4.4x 2026/27 EV to recurrent EBITDA, with net leverage declining to 1.5-1.7x by 2026/27YE. Management remains focused on lowering net debt to $1.2-1.3bn from $1.7bn as of 3Q26 and may discuss reinstating the dividend policy only by early next year;