J.P. Morgan LatAm FTM 26 Jun 26 FEMSA; Brazil Beer; Tenaris SA; Weg; AmBev and More

Research evidence excerpt

J.P. Morgan LatAm FTM 26 Jun 26 FEMSA; Brazil Beer; Tenaris SA; Weg; AmBev and More

Latin America Equity Research

LatAm First to Market 26 June 2026

Top Stories

FEMSA (Joseph Giordano)

Priced for the Engine, Optionality for Free? A Deep Dive Into The Key Value Drivers

FEMSA remains a Mexico retail-led story, anchored in Oxxo Mexico and gradually complemented by Spin while Bara and Oxxo

Brazil gain momentum. Execution is improving at the core: affordability is supporting same-store sales, commercial income and

financial services remain margin levers, and the new disclosure makes the core retail engine easier to model and value. Also,

the good FCF and more disciplined capital distribution from the past 2-3y brings more comfort around capital allocation, driving

a material holding discount contraction from an estimated +50% early in ‘23 to ~18% currently. Still, in our view, valuation

already captures a meaningful portion of the improvements and potential upside, particularly as “new” growth levers are

unlikely to bring material improvements to results trends over the next 3-5y given the size and relevance of core Oxxo Mexico.

Thus, within a choppy macro environment in Mexico, not a high growth profile (8.5% 5yr EBITDA CAGR / 12% EPS) and

trading at 24x/22x ‘26E/’27E P/E, respectively, with core retail operations coming at rich 29x/25x - a +80% premium to other

Mexican retailers, we remain Neutral on Femsa seeing further re-rating as unlikely. In this note we deep dive into Femsa’s main

value drivers and refresh our model - ‘26E/’27E EPS increased by 4%/7%, reflecting the better ST momentum, while,

accordingly, our Dec’26 PT moves to Ps219/sh from Ps 210.

Brazil Beer (Lucas Ferreira)

World Cup 2026: What to Expect Based on Previous Experiences