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Fomento Economico Mexicano
(NYSE:FMX)
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Rating:72Outperform
Price Target:
$143.00
▲(15.59% Upside)
Action:Upgraded
Date:10/21/26
The score is driven primarily by solid financial performance—especially the step-up in free cash flow—supported by a broadly positive earnings call highlighting growth and operational progress. Technicals are constructive but appear overextended, while valuation is mixed with a higher P/E partially balanced by a strong dividend yield.
Positive Factors
Strong cash generation
Rapid improvement in operating and free cash flow strengthens FEMSA’s ability to fund store expansion, technology, debt service, and shareholder returns internally. Healthy free cash flow conversion also provides resilience across its retail, beverage, and logistics businesses over the next several quarters.
Negative Factors
Rising leverage
The upward leverage trend leaves FEMSA with less financial flexibility than in prior years, especially while it continues investing heavily in stores and other platforms. Higher debt exposure can constrain capital allocation and make earnings and cash flow more sensitive to weaker operating conditions.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Rapid improvement in operating and free cash flow strengthens FEMSA’s ability to fund store expansion, technology, debt service, and shareholder returns internally. Healthy free cash flow conversion also provides resilience across its retail, beverage, and logistics businesses over the next several quarters.
Read all positive factors
Fomento Economico Mexicano (FMX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$25.78B
Dividend Yield5.88%
Average Volume (3M)527.31K
Price to Earnings (P/E)23.5
Beta (1Y)0.16
Revenue Growth18.16%
EPS Growth89.79%
CountryUS
Employees368,776
SectorConsumer Defensive
Sector Strength42
IndustryBeverages - Non-Alcoholic
Share Statistics
EPS (TTM)5.28
Shares Outstanding201,518,510
10 Day Avg. Volume732,576
30 Day Avg. Volume527,314
Financial Highlights & Ratios
PEG Ratio-1.79
Price to Book (P/B)2.49
Price to Sales (P/S)0.73
P/FCF Ratio21.03
Enterprise Value/Market Cap2.36
Enterprise Value/Revenue1.26
Enterprise Value/Gross Profit3.10
Enterprise Value/Ebitda8.32
Forecast
1Y Price Target
$140.17Price Target Upside13.30% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)98.96
Revenue Forecast (FY)$909.15B
Fomento Economico Mexicano Business Overview & Revenue Model
Company Description
Fomento Económico Mexicano, S.A.B. de C.V. (FEMSA) is a diverse multinational enterprise. Its operations include acting as a key bottler, marketer, and distributor of Coca-Cola trademark beverages across a wide territory encompassing Mexico, Guate...
How the Company Makes Money
FEMSA makes money primarily through (1) retail sales in its convenience-store network, (2) income linked to its equity stake in Coca-Cola FEMSA, and (3) revenue from logistics and distribution services.
1) Retail (OXXO and other small-format form...
Fomento Economico Mexicano Earnings Call Summary
Earnings Call Date:Jul 28, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 28, 2026
Earnings Call Sentiment Positive
The call was broadly positive, supported by 9.3% consolidated revenue growth, 7.2% operating income growth, a 64.9% increase in net income, strong OXXO Mexico traffic and operating income recovery, Bara expansion, improving Colombia and Brazil operations, Coca-Cola FEMSA's record South American volumes, and balance sheet deleveraging. However, management highlighted fading World Cup tailwinds, a soft Mexican consumer, OXXO Mexico gross margin contraction, pressure in fuel and health, weak German and B2B performance, and continued losses at Spin and OXXO Brazil. Highlights significantly outweighed the lowlights.Positive Updates
Consolidated Revenue, Operating Income, and Net Income Growth
Second-quarter total revenues increased 9.3% year-over-year and operating income grew 7.2%. Excluding the OXXO Brazil effect and on a comparable currency-neutral basis, revenues and operating income grew 10.1% and 11.7%, respectively. Net consolidated income increased 64.9% to MXN 9.2 billion, helped by operating income growth, lower net financing expenses, and a significantly lower non-cash foreign exchange loss.
Negative Updates
OXXO Mexico World Cup Benefit Will Fade
Management estimated that at least 60% of the OXXO Mexico traffic uplift was attributable to the World Cup, evenly split between Panini collectibles and consumption tied mainly to Mexico's four June matches. The World Cup has ended, comparisons will become tougher, and management expects the next quarter to show a more normalized result.
Read all updates
Q2-2026 Updates
Positive
Negative
Consolidated Revenue, Operating Income, and Net Income Growth
Second-quarter total revenues increased 9.3% year-over-year and operating income grew 7.2%. Excluding the OXXO Brazil effect and on a comparable currency-neutral basis, revenues and operating income grew 10.1% and 11.7%, respectively. Net consolidated income increased 64.9% to MXN 9.2 billion, helped by operating income growth, lower net financing expenses, and a significantly lower non-cash foreign exchange loss.
Read all positive updates
Company Guidance
For the second half, management said the World Cup tailwind is over and the comparison base will get tougher; OXXO Mexico’s normalized same-store sales tend to grow at “inflation plus one,” with “the mid-single-digit” as the normalized series and, “If inflation is going to be close to four, same-store sales should be close to five.” Gross margin contraction “could be smaller than what we saw this quarter,” though “there will be quarters where it could be a little bit higher,” while EBIT margin is expected to “continue to grow gradually”; the excise tax effect will remain “for the next couple of quarters” until next January. FEMSA expects to reach 700 stores in both Brazil and Colombia by the end of the year, with Brazil expected to take “a few years” to find a sweet spot for accelerated expansion; Bara’s pace of openings will try to improve in coming quarters, its same-store sales continue to increase by double digits, and OXXO Mexico’s food service ambition is to reach “at least towards what Colombia has,” versus “the mid-single digits” currently and “the mid to high mid-teens” in Colombia and Europe.Fomento Economico Mexicano Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
63
Positive
Cash Flow
78
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 48.38B | 46.65B | 37.49B | 702.69B | 597.01B | 505.46B |
| Gross Profit | 19.60B | 18.95B | 15.42B | 279.51B | 241.52B | 206.18B |
| EBITDA | 7.32B | 6.32B | 5.26B | 88.47B | 93.26B | 80.38B |
| Net Income | 1.74B | 1.08B | 1.28B | 65.69B | 23.91B | 28.50B |
Balance Sheet | ||||||
| Total Assets | 45.92B | 44.15B | 40.84B | 805.86B | 798.82B | 737.50B |
| Cash, Cash Equivalents and Short-Term Investments | 116.55B | 7.10B | 8.78B | 191.84B | 83.49B | 121.82B |
| Total Debt | 14.47B | 14.29B | 12.29B | 232.90B | 285.06B | 252.94B |
| Total Liabilities | 28.70B | 25.88B | 22.56B | 427.49B | 461.01B | 402.38B |
| Stockholders Equity | 12.39B | 13.59B | 14.27B | 303.86B | 262.60B | 262.60B |
Cash Flow | ||||||
| Free Cash Flow | 3.51B | 1.61B | 1.38B | 11.56B | 40.14B | 52.79B |
| Operating Cash Flow | 5.74B | 3.94B | 3.48B | 49.68B | 72.58B | 73.09B |
| Investing Cash Flow | -630.22M | -114.32M | -1.59B | 132.29B | -46.43B | -46.17B |
| Financing Cash Flow | -6.20B | -5.10B | -4.03B | -92.55B | -35.90B | -36.99B |
Fomento Economico Mexicano Technical Analysis
Positive
123.71
Price Trends
118.68
Positive
121.19
Positive
114.60
Positive
Market Momentum
2.32
Negative
70.16
Negative
84.04
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FMX, the sentiment is Positive. The current price of 123.71 is above the 20-day moving average (MA) of 119.36, above the 50-day MA of 118.68, and above the 200-day MA of 114.60, indicating a bullish trend. The MACD of 2.32 indicates Negative momentum. The RSI at 70.16 is Negative, neither overbought nor oversold. The STOCH value of 84.04 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FMX.
Fomento Economico Mexicano Risk Analysis
Fomento Economico Mexicano disclosed 34 risk factors in its most recent earnings report. Fomento Economico Mexicano 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 1 New Risks
1.
If we fail to comply with privacy and data protection laws, we could be subject to adverse publicity, business disruption, data loss, government enforcement actions and/or private litigation, any of which could negatively affect our business and operating results. Q4, 2023
Fomento Economico Mexicano Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $51.91B | 16.05 | 18.13% | 3.70% | 4.24% | 19.95% | |
76 Outperform | $6.09B | 19.30 | 16.86% | 3.63% | 13.18% | 11.27% | |
72 Outperform | $25.78B | 23.50 | 13.60% | 5.88% | 18.16% | 89.79% | |
72 Outperform | $165.69B | 13.97 | 12.72% | 1.64% | 6.60% | 31.61% | |
72 Outperform | $4.27B | 12.50 | 23.62% | 4.76% | 7.67% | 18.60% | |
69 Neutral | $22.46B | 11.83 | 23.58% | 3.11% | -4.31% | 62.57% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% |
* Consumer Defensive Sector Average
FMX
Fomento Economico Mexicano
127.98
36.83
40.40%
BUD
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82.29
21.50
35.36%
KOF
Coca Cola Femsa SAB De CV
117.81
36.61
45.08%
STZ
Constellation Brands
132.02
-3.73
-2.75%
AKO.A
Embotelladora Andina SA
23.89
4.62
23.99%
ABEV
Ambev SA
3.27
1.17
55.71%
Fomento Economico Mexicano Corporate Events
FEMSA Raises CHF 300 Million in Swiss Bond Market to Enhance Financial Flexibility
Sep 23, 2026
Fomento Económico Mexicano, S.A.B. de C.V. (FEMSA) is a diversified Mexican retail and beverage group whose businesses span OXXO small-format convenience stores in Mexico, broader Americas and U.S. operations including gas stations, European ...
FEMSA Launches $280 Million Accelerated Share Repurchase Program
Sep 14, 2026
On September 14, 2026, FEMSA announced it had entered into an accelerated share repurchase agreement with a U.S.-based financial institution, targeting the buyback of up to $280 million in American Depositary Shares subject to market conditions. T...
FEMSA Posts Strong 2Q 2026 Results and Unveils New Reporting Structure
Jul 28, 2026
On July 28, 2026, FEMSA reported its second-quarter 2026 results, unveiling a revised segment reporting structure that more clearly separates OXXO Mexico from a new Americas Mobility unit, alongside Europe, Health, and Coca-Cola FEMSA. The change...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.