UBS starts BBB Foods with a Buy on above-peer EBITDA growth

As previously reported, UBS initiated coverage of BBB Foods with a Buy rating and $26 price target. As the leading hard discounter in Mexico, BBB is the fastest growing grocery retailer within the firm’s LatAm coverage and the firm forecasts a 2024-26 EBITDA compound annual growth rate that is over 3.5 times the local peer group average, the analyst tells investors. The firm expects the focus on Every Day Low Price and Every Day Low Cost, along with a “solid” track record of store openings, to translate into another five-year period of greater than 20% sales compound annual growth, the analyst added.