Coca-Cola Femsa SAB de CV ADR

KOF: XNYS (USA)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	$43.00	Dsjpq	Cxnlzmnqg

Coca-Cola Femsa Earnings: Strong Volume and Pricing, Digital Investment a Long-Term Upside

Dan Su

Feb 22, 2024

Wide-moat bottler Coke Femsa reported increases of 8% and 11% in 2023 sales and operating profits, respectively, matching our estimates. Excluding currency headwinds, volumes were up 8% and underlying pricing up 10%, which we view as a healthy mix that exemplifies the strength of the Coke brands and the bottler’s in-market execution expertise. For 2024, strong demand in Mexico and Brazil should support a mid-single-digit volume expansion, and we continue to see our 10-year projections for a 6% sales compound annual growth rate and 14% average operating margins as attainable. We plan to maintain our $94 fair value estimate.

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