Femsa downgraded to Neutral from Overweight at JPMorgan

JPMorgan analyst Joseph Giordano downgraded Femsa to Neutral from Overweight with a price target of $109, up from $104. The anticipated cash-back to shareholders from Femsa’s “rich” cash position has “disappointed many,” with its dividends and buyback activity falling short of expectations, the analyst tells investors in a research note. The firm says the stock’s holding discount, which was 50%-55%, now stands at 35%, should be lower, around 15%, aligning with other Latin America holding companies, as Femsa’s only significant non-retail asset remaining is the 47% stake in Coca-Cola Femsa. JPMorgan sees a balanced risk/reward at current share levels.