Coca-Cola Femsa Earnings: Resilient Volume Despite Price Hikes, but Currencies Remain a Challenge

We plan to maintain our $94 fair value estimate on wide-moat Coca-Cola Femsa after absorbing the bottler’s better-than-expected third-quarter results, with revenue up 10% and adjusted net profits up 23%, outpacing our estimates of 8% and 15%, respectively. We plan to revise our 2023 estimates upward to incorporate the strong results, but our 10-year forecast for mid-single-digit percentage sales growth and operating margins averaging 14% remain in place. The stock looks attractive, trading at a 22% discount to our intrinsic valuation, and we suggest long-term investors consider buying this name given its strategic partnership with Coca Cola and cost advantages.