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Research evidence excerpt

Top Stories

ith our illustrative cash-deal scenario implying ~17% earnings dilution in year one, pre-tax break-even

synergies of ~R1.8bn, and a path to accretion by year three. We also frame Mr Price (N) + Truworths (N) as a second

coherent combination, which on our assumptions, is immediately earnings accretive in year one (~6%), with potential upside

rising to ~25-35% in years two to three. These pairs, in our view, reflect similar operating DNA and the potential to meaningfully

complement each other’s portfolio footprints.

| | Mexico Food (Lucas Ferreira/Froylan Mendez), Mexico

Rewarding Momentum. Upgrading Bimbo to N, Downgrading Gruma to UW. Reiterating Sigma OW

We are reshuffling preferences post earnings: we reiterate our Overweight on Sigma, upgrade Bimbo from Underweight to

Neutral, and downgrade Gruma from Neutral to Underweight, reflecting how the market is currently rewarding earnings

momentum and near-term delivery amid elevated volatility. Sigma remains our preferred way to play Mexican Food as it

combines the cleanest earnings trajectory (Europe recovery milestones and 2H seasonality; U.S. sequential improvement with

clearer 2H signposts) with the most defensible valuation ~14x fwd P/E at the middle of the food pack but with by above-average

~17% 2Y EPS CAGR, making it the best-balanced story on valuation + growth + momentum. We upgrade Bimbo to Neutral as

momentum is improving (notably better margin/FCF confidence via the higher FY26 margin guide and lower CapEx), but at

~20x fwd P/E the stock screens at a premium to peers, keeping us from OW even if it may post the strongest EPS growth near

term (helped by easier comps). Gruma moves the other way: despite being the cheapest (~11x P/E), we see deteriorating