REAL-TIME GLOBAL RESEARCH
Top Stories
Key takeaways
- Upgrade to Overweight: Better Momentum and Convenience Premium Meets LatAm Optionality FEMSA’s equity story has improved on three key fronts: 1) better than anticipated e arnings momentum; 2) more minority friendly and d
- T he stock has re-rated, but we still see further upside as an important leg of the story remains materialization of LatAm ex-Mexico growth and further narrowing of the implicit holding discount.
- As we refresh our estimates (our EPS lands 10-15% above consensus for 26/27e), we lift our ‘27E/’28E EPS by 12% and establish a new Dec’27 PT of Ps271/sh, replacing our previous Dec’26 PT of Ps219 and implying 22% upside
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Research evidence excerpt
Upgrade to Overweight: Better Momentum and Convenience Premium Meets LatAm Optionality FEMSA’s equity story has improved on three key fronts: 1) better than anticipated e arnings momentum; 2) more minority friendly and disciplined capital allocation with improved disclosure, with a 6% dividend yield adding downside support; and 3) good operating trends in a challenging Mexican consumption backdrop supporting the view that Oxxo’s valuation deserves to be benchmarked against global c-store peers rather than only Mexican food retail, granting a material valuation premium . T he stock has re-rated, but we still see further upside as an important leg of the story remains materialization of LatAm ex-Mexico growth and further narrowing of the implicit holding discount. As we refresh our estimates (our EPS lands 10-15% above consensus for 26/27e), we lift our ‘27E/’28E EPS by 12% and establish a new Dec’27 PT of Ps271/sh, replacing our previous Dec’26 PT of Ps219 and implying 22% upside (with a 0.5pp higher Ke vs previous). With Femsa trading at 21x/18.5x ‘27E/’28E P/E, and 26x/23x implicitly for core retail ops, we upgrade FEMSA to Overweight from Neutral. We continue to view TBBB as our top pick.
Mexican Bottlers (Lucas Ferreira)
Better Volumes, Different Paths to Earnings Growth - 3Q26 Preview We update our estimates for Mexican bottlers ahead of 3Q26 results. Overall, we expect a better volume backdrop sequentially across both companies, particularly in Mexico and South America, while margin dynamics remain more mixed. KOF should deliver the stronger 3Q26 on consolidated earnings growth (led by South America), but AC* should still post a strong 3Q26 with a cleaner operating performance in Mexico versus KOF, which the market should welcome. Valuation frames the near-term asymmetry into 3Q: KOF is running at an 11% premium to AC* on forward P/E (trading above 16x versus 14.5x for AC*), despite history suggesting AC* typically trades at a 5% premium to KOF. This inversion underscores KOF's stronger
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