Top-Line Momentum Continues, But Fair Valuation Amid 2027 Risks Keeps Us EW

Research evidence excerpt

Top-Line Momentum Continues, But Fair Valuation Amid 2027 Risks Keeps Us EW

IdeaMExhibit 1: While Andina shares are up significantly over the past quarters, the

performance has been not far the Chilean market. This year, it has outperformed a

bit (~5p.p.)

Andina vs. IPSA: Stock Performance

(Jan'25 = 100)

180 Andina IPSA

170 Andina vs. Index:

Since 2025: -8 p.p.

160 YTD: +5 p.p.

Jan-25 Feb-25 Mar-25 Apr-25 May-25 Jun-25 Jul-25 Aug-25 Sep-25 Oct-25 Nov-25 Dec-25 Jan-26 Feb-26 Mar-26 Apr-26 May-26 Jun-26 Jul-26

Source: Bloomberg, Morgan Stanley Research

Slow consumer environment and cost inflation risks keep us guarded into 2027.

For next year, we expect lower margins as Andina will likely cycle higher raw

material costs (based on future curves). For instance, we note that Aluminum is up

~25% y-y in 2026 (spot + futures), which has not been fully reflected in results yet,

while oil prices (proxy for PET and logistics costs — varying on timing and

magnitude of impact) are up ~35% since the start of the year. On sugar, the

company is currently benefitting from lower prices (down -14% y-y in 2026), but

that may likely fade in the NTM as futures show a +6% y-y increase in 2027. Given

the very competitive environment in Chile (e.g., 1H26 unit revenues below inflation)

and a slower consumer in Brazil ahead (MSe PCE at +0.6% y-y in 2027), we think

passing through higher costs will be challenging next year. Therefore, we now

assume Andina’s EBITDA margin declines -30bps y-y in 2027 (vs. +20bps before).

Exhibit 2: We think fully passing Exhibit 3: ...and we now model a

through potentially higher costs will be ~30bps y-y contraction in Andina's

challenging in coming quarters… EBITDA margin in 2027

Andina Chile: Prices vs. CPI Andina Consolidated EBITDA Margin

20%

6.0% Andina Avg.