Analyst Ricardo Alves of Morgan Stanley maintained a Buy rating on Fomento Economico Mexicano (FMX – Research Report), with a price target of $117.00.
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Ricardo Alves has given his Buy rating due to a combination of factors, primarily focusing on Fomento Economico Mexicano’s recent strategic financial decisions. The company has initiated an Accelerated Share Repurchase (ASR) program, committing to repurchase $250 million worth of its shares, which is approximately 1% of its market capitalization. This move is seen as a positive step towards enhancing shareholder value and demonstrates the company’s commitment to returning capital to its investors.
Furthermore, Alves anticipates further actions from FEMSA to increase shareholder remuneration. Historical context shows that previous ASR programs were significantly larger, and with a total shareholder remuneration program of $3.1 billion planned for 2025, there is an expectation for a substantial increase in buyback activities in the latter half of the year. This strategic financial planning and commitment to shareholder returns underpin Alves’s optimistic outlook on the stock.