UPDATE: Citigroup Initiates FEMSA at Neutral with $94 PT on Valuation

Citigroup initiated its coverage on FEMSA FMX with a Neutral rating and a price target of $94. Citigroup commented, "Our Neutral is based on valuation. Oxxo is posting double-digit top-line growth with stable margins. Services continue to support Oxxo's above-industry samestore sales growth outlook. However, Femsa's beverage assets (an estimated 65% of 2012E net income), face mixed trends. Top line indicators are mostly healthy, expect in Colombia and Mexico (in 2Q12). Our main concerns are incremental opex, currency-related, labor and merger cost pressures in Latin America and the risk of further weakening of Europe's economies (45% of Heineken's EBIT)." FEMSA closed at $86.96 on Thursday.