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

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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

DateFirmActionFromTo
Jan 2020CitigroupUpgradesNeutralBuy
Oct 2017BarclaysMaintainsOverweight
Oct 2017JP MorganUpgradesNeutralOverweight

View More Analyst Ratings for FMX
View the Latest Analyst Ratings

 

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Posted-In: JP MorganAnalyst Color Upgrades Price Target Analyst Ratings

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