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

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Coca Cola Femsa SAB De CV

(NYSE:KOF)

74Outperform

Coca Cola Femsa's stock demonstrates strong financial performance with substantial revenue and profit growth, solid operational efficiency, and a robust balance sheet. Technical indicators show positive momentum, although caution is advised due to near overbought levels. Valuation appears fair, with a reasonable P/E ratio and attractive dividend yield. The earnings call highlighted strengths in certain regions but also challenges in others, impacting the overall outlook.

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

Market Cap

$4.79B

Dividend Yield3.18%

Average Volume (3M)219.05K

Price to Earnings (P/E)15.3

Beta (1Y)0.28

Revenue Growth1.54%

EPS Growth4.48%

CountryUS

Employees118,683

SectorConsumer Defensive

Sector Strength78

IndustryBeverages - Non-Alcoholic

Share Statistics

EPS (TTM)1.59

Shares Outstanding52,520,763

10 Day Avg. Volume263,863

30 Day Avg. Volume219,051

Financial Highlights & Ratios

PEG Ratio25.67

Price to Book (P/B)2.50

Price to Sales (P/S)0.00

P/FCF Ratio77.50

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$108.00

Price Target Upside18.45% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering3

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 exhibited strong financial health with substantial revenue and profit growth, supported by effective cost management and operational efficiency. The balance sheet remains robust with moderate leverage, although monitoring of debt levels is advisable. While cash flow data for the latest period is incomplete, historical performance reflects solid cash generation, underscoring the company's ability to sustain growth and manage financial obligations effectively.

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
285.13B	279.79B	245.09B	226.74B	194.80B	183.62B
	Gross Profit
131.74B	128.74B	110.86B	100.30B	88.60B	82.81B
	EBIT
39.34B	38.58B	34.35B	30.84B	27.40B	25.24B
	EBITDA
41.42B	52.85B	43.82B	40.45B	37.33B	32.44B
	Net Income Common Stockholders
23.89B	23.73B	19.54B	19.03B	15.71B	10.31B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
30.51B	32.78B	31.06B	40.28B	47.25B	43.50B
	Total Assets
312.06B	307.99B	273.52B	278.00B	271.57B	263.07B
	Total Debt
77.60B	78.39B	67.73B	80.81B	87.29B	88.78B
	Net Debt
77.60B	45.62B	36.67B	40.53B	40.04B	45.29B
	Total Liabilities
152.34B	157.44B	139.81B	146.12B	144.00B	140.61B
	Stockholders Equity
151.69B	143.43B	127.03B	125.38B	121.55B	116.87B
Cash Flow		Free Cash Flow
489.69M	16.65B	21.66B	17.76B	22.73B	60.35B
	Operating Cash Flow
1.85B	42.44B	42.29B	35.49B	32.72B	70.29B
	Investing Cash Flow
-1.49B	-23.39B	-20.07B	-19.60B	-9.55B	-21.02B
	Financing Cash Flow
-784.85M	-19.64B	-26.35B	-20.85B	-20.26B	834.00M

Coca Cola Femsa SAB De CV Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price91.18

Price Trends

50DMA

91.43

Negative

100DMA

85.25

Positive

200DMA

84.45

Positive

Market Momentum

MACD

0.27

Positive

RSI

43.35

Neutral

STOCH

16.75

Positive

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 91.18 is below the 20-day moving average (MA) of 94.59, below the 50-day MA of 91.43, and above the 200-day MA of 84.45, indicating a neutral trend. The MACD of 0.27 indicates Positive momentum. The RSI at 43.35 is Neutral, neither overbought nor oversold. The STOCH value of 16.75 is Positive, 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 (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KO	80 Outperform	$299.28B	27.84	40.98%	2.79%	1.15%	0.28%
CCEP	79 Outperform	$41.24B	26.84	17.43%	2.38%	11.73%	-15.34%
KDP	74 Outperform	$45.51B	30.35	6.13%	2.70%	3.95%	-28.73%
KOF	74 Outperform	$4.79B	15.34	17.12%	3.18%	1.54%	4.48%
COKE	66 Neutral	$10.25B	20.44	36.83%	0.69%	3.21%	31.83%
Sector *	64 Neutral	$8.72B	14.80	5.05%	174.27%	3.54%	3.26%
PRMB	63 Neutral	$11.97B	20.07	-2.83%	1.16%	90.28%	-105.48%

* Consumer Defensive Sector Average

Performance Comparison

KOF

Coca Cola Femsa SAB De CV

91.18

-6.17

-6.34%

COKE

Coca-Cola Bottling Co Consolidated

1,175.34

227.67

24.02%

Coca-Cola

69.53

8.26

13.48%

PRMB

Primo Brands

31.80

11.54

56.96%

KDP

Keurig Dr Pepper

33.51

0.23

0.69%

CCEP

Coca-Cola Europacific Partners

87.67

14.13

19.21%

Coca Cola Femsa SAB De CV Earnings Call Summary

Earnings Call Date:Apr 25, 2025

(Q1-2025)

% Change Since: -7.35%|

Next Earnings Date:Jul 28, 2025

Earnings Call Sentiment Neutral

While the company demonstrated strong revenue and profit growth, particularly in the South America division, challenges in Mexico and Central America, increased competitive pressures, and higher operational costs offset some of these gains. Sustainability efforts and operational efficiencies provided positive momentum, but the overall environment remains challenging.

Q1-2025 Updates

Positive Updates

Revenue and Profit Growth

Despite a 2.2% decline in consolidated volume, total revenues grew 10% to MXN70.2 billion, and gross profit increased 12% to MXN31.8 billion, with a margin expansion of 80 basis points to 45.4%.

South America Division Performance

Volumes in the South America division increased 1%, with significant growth in Brazil, Argentina, and Uruguay. Revenues increased 17.4%, and gross profit rose 22.8%, leading to a margin expansion of 190 basis points to 42.5%.

Sustainability Achievements

Increased renewable energy use to 84%, improved water efficiency, and diverted 99% of operational waste from landfills while strengthening community support programs.

Operational Efficiencies

Adjusted EBITDA grew 11% to reach MXN13.3 billion, and EBITDA margin expanded 20 basis points to 18.9%, driven by cost and expense controls.

Negative Updates

Volume Decline in Key Markets

Consolidated volume declined 2.2% year-on-year, with notable declines in Mexico and Colombia, affecting overall performance.

Mexico and Central America Challenges

Volumes declined 4.6% in the Mexico and Central America division, with a 5% decrease in operating income and a 140 basis point contraction in operating margin.

Increased Competitive Intensity

Increased promotional activities across the market led to heightened competitive intensity, particularly affecting Mexico's performance.

Higher Operating Expenses

Operating margin contracted by 30 basis points to 13.2% due to higher operating expenses such as freight, labor, and maintenance.

Company Guidance

During Coca-Cola FEMSA's first quarter 2025 conference call, the company provided guidance on its financial performance and strategic initiatives. The company reported a 2.2% decline in consolidated volume year-on-year to 986.5 million unit cases, with notable decreases in Mexico and Colombia, offset by growth in Brazil, Argentina, Uruguay, and Guatemala. Despite the volume decline, total revenues grew 10% to MXN70.2 billion, aided by favorable currency translation and revenue management initiatives, with a currency neutral increase of 5.9%. Gross profit rose by 12% to MXN31.8 billion, resulting in an 80 basis point margin expansion to 45.4%, driven by lower sweetener costs and raw material hedging. Operating income increased 7.3% to MXN9.2 billion, though operating margin contracted by 30 basis points to 13.2% due to higher expenses. Adjusted EBITDA rose 11% to MXN13.3 billion, with a 20 basis point margin expansion to 18.9%. The company also highlighted operational strategies, including promotional activities and supply chain improvements in Mexico, where volumes declined 5.4%. In Guatemala, volumes increased 1.9% amid macroeconomic challenges, while Brazil saw a resilient 2.5% volume growth. The call emphasized Coca-Cola FEMSA's adaptability in navigating uncertainties and its focus on long-term strategic goals, including sustainability efforts showcased in the company's recent integrated annual report.

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.