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JP Morgan Beverages de Mexico: FMX Upgraded On Core Sales Growth


In a report published Thursday, analysts at JP Morgan upgraded Fomento Economico Mexicano SAB (NYSE: FMX) from Neutral to Overweight. The price target has been raised from $101 to $106. Strong execution helped the company attract a stronger customer base in Mexico, driving better stock valuation as well as potential upside.

JP Morgan expects Oxxo sales to accelerate in 2015, driven by the company's initiatives, a better economy and attractive PEG. "We expect Oxxo's same-store sales to surpass inflation again in 2015 post the economic slowdown and excise tax hike hit on revenues in 2014," the analysts said.

Successful execution of initiatives is also expected to drive a recovery in the company's drugstores and gas stations.

The lockup period for Fomento's share holding in Heineken N.V. (AMS: HEIA) expired recently. "It's hard to imagine that FMX management has not been planning ahead for this $8.7bn amount; we see good reasons for such," the analysts stated.

JP Morgan expects any development in the context of this share holding to prove to be a potential catalyst for Fomento's shares.

Latest Ratings for FMX

Dec 2020Morgan StanleyDowngradesOverweightEqual-Weight
Nov 2020Itau BBADowngradesOutperformMarket Perform
Jan 2020CitigroupUpgradesNeutralBuy

View More Analyst Ratings for FMX
View the Latest Analyst Ratings


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