BBB Foods Inc (TBBB.N): Better, Bigger, Compounding. Initiating with Buy

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BBB Foods Inc (TBBB.N): Better, Bigger, Compounding. Initiating with Buy

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30 Jul 2026 19:50:44 ET │ 49 pages

BBB Foods Inc (TBBB.N)

Better, Bigger, Compounding. Initiating with Buy

CITI'S TAKE

We initiate coverage of Tiendas 3B with a Buy rating and US$49/sh TP

placing it among the Top Pick in Latam Consumer. Tiendas has already

demonstrated that its hard-discount model can scale successfully across Buy

Mexico, we see the company now entering its most attractive phase. Store Price (29 Jul 26 16:00) US$39.48

openings remain the foundation of the growth story, but a growing base of

Target price US$49.00stores is now reaching a more profitable stage, to allow EBITDA and

ultimately earnings to grow faster than revenue. This earnings inflection is Expected share price return 24.1%

underpinned by a differentiated hard-discount model, structural consumer Expected dividend yield 0.0%

tailwinds searching for value, negative working capital, founder-led

Expected total return 24.1%management and one of the industry's longest growth runways. While

Tiendas is trading at 17x 2027 EV/EBITDA (vs 8x for Walmex, 6x Mexico Market Cap US$4,760M

Consumer average), we expect the valuation premium to narrow through

earnings growth with the multiple declining to ~9x by 2030.

Valuation: Great Businesses Are Rarely Cheap. At ~17x 2027 EV/EBITDA reflects the Price Performance

company's position in its earnings lifecycle. We forecast 26% revenue CAGR, (RIC: TBBB.N, BB: TBBB US)

average ~740 store openings, 31% EBITDA (post IFRS ex-SBC) CAGR, with EBITDA

margins expanding from 5.7% in 2025 to approximately 6.7% through 2026-2030.

The Debate Has Changed. The relevant question is not whether 17x EV/EBITDA is

expensive today, but whether Tiendas can grow into that valuation. We believe it