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Ara Plummets as UBS Cuts Shares to Neutral: Mexico City Mover

Consorcio Ara SAB (ARA*), the Mexican homebuilder whose shares have rallied amid an industry selloff, dropped the most in three months after UBS AG cut the stock to neutral from buy.

Ara declined 8.1 percent to 5.98 pesos at 3:26 p.m. in Mexico City, the biggest decline on a closing basis since April 15. The loss was the biggest on the IPC SmallCap Index, which fell 0.2 percent.

The shares of Mexico City-based Ara have gained 45 percent this year, while the Mexico Habita Index of homebuilders has lost 66 percent. Ara has rallied 39 percent since July 23, when the company reported second-quarter earnings that fell less than analysts forecast.

“We think upside is more limited,” UBS analyst Marimar Torreblanca wrote in a research note to clients today. Ara is now “actually trading above historic average multiples,” Torreblanca wrote.

To contact the reporter on this story: Newley Purnell in New York at npurnell1@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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