Coca Cola Femsa SAB De CV (KOF) AI Stock Analysis

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Coca Cola Femsa SAB De CV

(NYSE:KOF)

73Outperform

Coca Cola Femsa's strong financial performance, marked by revenue growth and operational efficiency, is a significant strength. Technical indicators support a positive stock trend, while the valuation offers a reasonable P/E ratio and an attractive dividend yield. The absence of recent earnings call data or corporate events leaves the analysis focused on available financial and market data.

Coca Cola Femsa SAB De CV (KOF) vs. S&P 500 (SPY)

Market Cap

$4.86B

Dividend Yield3.14%

Average Volume (3M)188.16K

Price to Earnings (P/E)15.1

Beta (1Y)0.33

Revenue Growth8.74%

EPS Growth16.30%

CountryUS

Employees104,000

SectorConsumer Defensive

Sector Strength93

IndustryBeverages - Non-Alcoholic

Share Statistics

EPS (TTM)6.15

Shares Outstanding52,520,763

10 Day Avg. Volume174,760

30 Day Avg. Volume188,161

Financial Highlights & Ratios

PEG Ratio0.92

Price to Book (P/B)N/A

Price to Sales (P/S)1.54

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$99.30

Price Target Upside11.07% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Coca Cola Femsa SAB De CV Business Overview & Revenue Model

Company DescriptionCoca-Cola Femsa, S.A.B. de C.V. (KOF) is the largest franchise bottler of Coca-Cola products in the world, operating in Latin America. The company engages in the production, distribution, and marketing of non-alcoholic beverages, including soft drinks, waters, flavored waters, and other beverages. Its operations span across several countries, with a significant presence in Mexico, Central America, South America, and the Philippines. Coca-Cola Femsa collaborates closely with The Coca-Cola Company to deliver a wide range of well-known beverage brands to its diverse customer base.

How the Company Makes MoneyCoca-Cola Femsa generates revenue primarily through the sale of bottled beverages. The company earns money by producing and distributing a variety of Coca-Cola branded drinks, such as Coca-Cola, Sprite, Fanta, and other products. Its revenue streams are primarily derived from the volume of beverages sold, which varies based on consumer demand within its operational regions. Coca-Cola Femsa benefits from its strategic partnerships, notably with The Coca-Cola Company, which provides it with access to a broad portfolio of products and marketing support. Additionally, economies of scale in production and distribution, along with strategic acquisitions and a robust distribution network, contribute significantly to the company's earnings.

Coca Cola Femsa SAB De CV Financial Statement Overview

Summary

Coca Cola Femsa has shown strong financial performance with significant revenue and profit growth, effective cost management, and operational efficiency. The balance sheet is solid with moderate leverage, though cash flow data is limited, historical performance is robust.

Income Statement

Very Positive

Coca Cola Femsa demonstrated robust revenue growth of 14.15% YoY in 2024, driven by strong market demand. Gross profit margin improved to 46.01%, reflecting effective cost management. Net profit margin also increased to 8.48%, indicating enhanced profitability. EBIT and EBITDA margins were healthy at 14.35% and 18.41% respectively, showing strong operational performance. The company has shown consistent growth in revenues and profitability over the years.

Balance Sheet

Positive

The balance sheet remains solid with a debt-to-equity ratio of 0.54, suggesting moderate leverage. Return on equity (ROE) improved to 16.55%, indicating effective utilization of equity. The equity ratio stands at 46.57%, reflecting a healthy capital structure. The company has maintained a stable equity base, though total debt levels have increased slightly compared to the previous year, necessitating careful management.

Cash Flow

Neutral

Cash flow analysis is limited due to missing current year data, but historical performance shows strong free cash flow generation, with a significant free cash flow growth rate of 21.98% in 2023. The company has maintained a positive free cash flow to net income ratio, ensuring sufficient cash generation to support operations. Attention to future cash flow stability is crucial as recent data is unavailable.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
266.57B	279.79B	245.09B	226.74B	194.80B	183.62B
	Gross Profit
121.89B	128.74B	110.86B	100.30B	88.60B	82.81B
	EBIT
37.75B	40.14B	34.35B	30.84B	27.40B	25.24B
	EBITDA
40.41B	51.51B	43.82B	40.45B	37.33B	32.44B
	Net Income Common Stockholders
21.80B	23.73B	19.54B	19.03B	15.71B	10.31B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
14.68B	32.78B	31.06B	40.28B	47.25B	43.50B
	Total Assets
107.75B	307.99B	273.52B	278.00B	271.57B	263.07B
	Total Debt
19.15B	76.88B	67.73B	80.81B	87.29B	88.78B
	Net Debt
5.97B	44.10B	36.67B	40.53B	40.04B	45.29B
	Total Liabilities
40.19B	157.44B	139.81B	146.12B	144.00B	140.61B
	Stockholders Equity
65.15B	143.43B	127.03B	125.38B	121.55B	116.87B
Cash Flow		Free Cash Flow
1.06B	0.00	21.66B	17.76B	22.73B	60.35B
	Operating Cash Flow
2.37B	0.00	42.29B	35.49B	32.72B	70.29B
	Investing Cash Flow
-1.44B	0.00	-20.07B	-19.60B	-9.55B	-21.02B
	Financing Cash Flow
-800.31M	0.00	-26.35B	-20.85B	-20.26B	834.00M

Coca Cola Femsa SAB De CV Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price89.40

Price Trends

50DMA

86.08

Positive

100DMA

82.26

Positive

200DMA

83.78

Positive

Market Momentum

MACD

1.98

Negative

RSI

68.63

Neutral

STOCH

87.71

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KOF, the sentiment is Neutral. The current price of 89.4 is below the 20-day moving average (MA) of 90.43, above the 50-day MA of 86.08, and above the 200-day MA of 83.78, indicating a neutral trend. The MACD of 1.98 indicates Negative momentum. The RSI at 68.63 is Neutral, neither overbought nor oversold. The STOCH value of 87.71 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for KOF.

Coca Cola Femsa SAB De CV Risk Analysis

Coca Cola Femsa SAB De CV disclosed 27 risk factors in its most recent earnings report. Coca Cola Femsa SAB De CV reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Coca Cola Femsa SAB De CV Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CCEP	79 Outperform	$38.67B	25.17	17.43%	2.54%	11.73%	-15.34%
KDP	76 Outperform	$45.87B	32.11	5.77%	2.68%	3.62%	-32.23%
COKE	74 Outperform	$11.39B	20.78	44.38%	0.46%	3.69%	60.51%
KOF	73 Outperform	$4.86B	15.07	17.94%	3.14%	8.74%	16.30%
KO	73 Outperform	$300.95B	28.42	41.86%	2.81%	1.96%	-0.45%
PRMB	69 Neutral	$12.69B	20.07	-3.43%	1.11%	29.32%	-100.27%
Sector *	62 Neutral	$20.19B	14.01	-16.14%	3.22%	1.15%	3.41%

* Consumer Defensive Sector Average

Performance Comparison

KOF

Coca Cola Femsa SAB De CV

89.40

-3.31

-3.57%

COKE

Coca-Cola Bottling Co Consolidated

1,288.05

447.07

53.16%

Coca-Cola

68.37

10.82

18.80%

PRMB

Primo Brands

32.98

15.82

92.19%

KDP

Keurig Dr Pepper

33.60

3.60

12.00%

CCEP

Coca-Cola Europacific Partners

82.99

16.05

23.98%

Coca Cola Femsa SAB De CV Earnings Call Summary

Earnings Call Date: Feb 21, 2025 | % Change Since: 5.25% | Next Earnings Date: Apr 23, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted significant revenue and operational growth, especially in digital transformation and certain regional markets like Guatemala and Brazil. However, these were balanced by challenges such as volume declines in key markets, unfavorable weather conditions in Mexico, and operational issues in Brazil. The sentiment reflects both strong achievements and notable challenges faced by the company.

Highlights

Double-Digit Revenue and Operating Income Growth

Despite facing unfavorable weather conditions in Mexico and a tough comparison base, Coca-Cola FEMSA's revenues and operating income grew by double digits year-on-year, with total revenues increasing by 10.7% to MXN 69.6 billion.

Digital Transformation Initiatives

Progress in digital transformation with Juntos+ reaching 1.2 million active users, with digital buyers now accounting for 56% of the customer base, up by 6 percentage points. The Premier Juntos+ loyalty program saw a 21% increase in enrolled clients.

Operating Margin and EBITDA Growth

Operating income increased by 13.9%, with an operating margin expanding by 30 basis points to 13.8%. Adjusted EBITDA grew by 18.4% to reach MXN 14 billion, with an EBITDA margin expansion of 130 basis points to 20.1%.

Water Efficiency Achievement

Coca-Cola FEMSA achieved a water use efficiency ratio of 1.36 liters per liter of beverage produced, marking a 21% improvement since 2016.

Positive Performance in Guatemala and Brazil

Guatemala saw a 7.5% increase in volumes due to a growing population and digital adoption. Brazil reported a 6.3% volume growth, supported by favorable weather and macro fundamentals.

Lowlights

Volume Declines in Key Markets

Despite achieving some growth, consolidated volumes increased only 0.8%, with declines observed in Mexico, Colombia, and Uruguay.

Challenges in Colombia

Colombia faced a decline in consumer confidence and household expenditures, resulting in a 4% year-on-year volume contraction.

Impact of Weather Events in Mexico

Mexico's volume declined by 1.5% due to 50% more rainfall and lower temperatures compared to the previous year.

Currency Depreciation Impact

The quarter saw a more neutral currency translation impact, with the depreciation of the Brazilian real and Argentine peso affecting revenue.

Operational Challenges in Brazil

Closure of the Portage plant in Brazil led to an impact of MXN 200 million due to incremental freight and other expenses.

Company Guidance

During Coca-Cola FEMSA's Q3 2024 earnings call, the company reported robust financial metrics, indicating resilience and strategic execution amid challenging conditions. Revenues increased by 10.7% to MXN 69.6 billion, driven by revenue management initiatives and a favorable mix, while operating income rose by 13.9% to MXN 9.6 billion, with an operating margin expansion of 30 basis points to 13.8%. Adjusted EBITDA grew by 18.4% to MXN 14 billion, reflecting a 130 basis point increase in margin to 20.1%. The company highlighted digital advancements, with 56% of its customer base as digital buyers and 920,000 clients enrolled in its loyalty program, Premier Juntos+, marking a 21% increase from the previous quarter. Additionally, the company noted a positive impact of MXN 340 million from insurance claims related to Hurricane Otis. Despite a slight volume decline in Mexico, driven by adverse weather and economic conditions, Coca-Cola FEMSA remains optimistic about future growth, supported by infrastructure investments and strategic initiatives across its territories.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.