Femsa downgraded to Equal Weight from Overweight at Morgan Stanley

Morgan Stanley downgraded Femsa (FMX) to Equal Weight from Overweight with a price target of $97, down from $132. The firm says the Overweight thesis is no longer justified despite the stock’s 25% drop this year following the Q2 miss. The case for an operational rebound ahead is unclear amid Femsa’s earnings volatility and “lackluster” buyback activity, the analyst tells investors in a research note. Morgan Stanley believes Oxxo’s operations may be challenged a couple of more quarters.