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Fomento Economico Mexicano SAB de CV ADR - Stock Quote FMX

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Morningstar's Fomento Economico Mexicano SAB de CV ADR Stock Analysis

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Narrow-Moat Femsa’s Recovery From the Pandemic Continues Despite Inflation; Shares Undervalued

David Swartz Equity Analyst

Analyst Note

| David Swartz |

Narrow-moat Femsa’s results for 2022’s first quarter put it on track to exceed our full-year expectations as economies in Mexico and its other territories normalize after the pandemic. Given solid momentum in its key segments, we expect to lift our fair value estimate of $93 per share by a low-single-digit percentage. We view its shares as undervalued.

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Fomento Economico Mexicano SAB de CV ADR's Company Profile

Business Description

Based in Mexico, Femsa is a conglomerate with controlling interests in four entities: publicly traded Coca-Cola Femsa (47% economic interest and 56% voting interest), Femsa Comercio, logistics and distribution, and CB Equity. The latter has a roughly 15% stake in Heineken, while Comercio operates through three business units: proximity, which contains Oxxo, the largest small-format chain in the Americas, with convenience stores in Mexico and South America (including Brazil through a joint venture with Raizen); health, which operates pharmacies across a geographic footprint like Oxxo; and fuel, which operates retail service stations under franchisee arrangements in Mexico. Femsa is also building logistics services and specialized distribution in the United States.

Contact
General Anaya No. 601 Pte., Colonia Bella Vista
Monterrey, NL, 64410, Mexico
T +52 8183286167
Sector Consumer Defensive
Industry Beverages - Brewers
Most Recent Earnings Mar 31, 2022
Fiscal Year End Dec 31, 2022
Stock Type
Employees 320,000

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