Coca-Cola Femsa SAB de CV ADR

KOF: XNYS (USA)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	$78.00	Fsdw	Nhkytbjc

South America Recovery a Bright Spot in Coke Femsa’s Solid 2022 Results; Shares No Bargain Yet

Dan Su

Feb 27, 2023

We are maintaining our $83 fair value estimate on wide-moat Coca-Cola Femsa after absorbing the bottler’s 2022 full-year results, which included revenue of MXN 227 billion (3% better than our estimate) and net income of MXN 19 billion (in line with our projection after adjusting for deferred taxes). Our 10-year forecast for 6% sales growth and operating margins averaging 14% remain in place. The current share price implies a 12% discount, though we suggest investors wait for a better entry point as macro and political volatilities in Latin America call for a wider margin of safety.

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