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Fomento Economico Mexicano
(NYSE:FMX)
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Rating:70Outperform
Price Target:
$145.00
▲(14.07% Upside)
Action:Upgraded
Date:05/05/26
FMX scores 70 primarily due to solid cash flow resilience and constructive price momentum, supported by very low P/E valuation and an ongoing shareholder return program. The score is held back by weaker recent fundamentals (sharp TTM revenue decline and compressed net margins), plus earnings-call risks including underlying net income pressure, Health division underperformance/receivables exposure, and cautious H2 outlook amid FX/financing headwinds.
Positive Factors
Cash generation
TTM free cash flow growth of ~14.5% provides FEMSA durable internal funding for capex, dividends and buybacks. Consistent cash generation cushions consumer cyclicality, supports deleveraging, and enables strategic investments in digital and store networks without heavy reliance on external financing.
Negative Factors
Underlying earnings quality
A one-time non-cash accounting gain materially inflated reported profits; excluding it, net income declined ~36.4% YoY. This masks real profitability deterioration driven by higher net financing expenses and lower interest income, weakening earnings quality and making near-term profit trends less predictable.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation
TTM free cash flow growth of ~14.5% provides FEMSA durable internal funding for capex, dividends and buybacks. Consistent cash generation cushions consumer cyclicality, supports deleveraging, and enables strategic investments in digital and store networks without heavy reliance on external financing.
Read all positive factors
Fomento Economico Mexicano (FMX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$24.64B
Dividend Yield6.1%
Average Volume (3M)479.19K
Price to Earnings (P/E)23.9
Beta (1Y)0.21
Revenue Growth18.16%
EPS Growth89.79%
CountryUS
Employees368,776
SectorConsumer Defensive
Sector Strength42
IndustryBeverages - Alcoholic
Share Statistics
EPS (TTM)4.79
Shares Outstanding201,518,510
10 Day Avg. Volume411,911
30 Day Avg. Volume479,194
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 Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$135.50Price Target Upside6.59% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
EPS Forecast (FY)98.06
Revenue Forecast (FY)$899.16B
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 generates revenue primarily by (1) selling goods and services through its retail operations and (2) producing and distributing beverages through its bottling operations, with additional revenue from logistics and other supporting activities....
Fomento Economico Mexicano Earnings Call Summary
Earnings Call Date:Apr 30, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Oct 23, 2026
Earnings Call Sentiment Positive
The call highlighted a clear operational recovery and margin expansion at OXXO Mexico, strong growth in Americas & Mobility (notably OXXO LatAm ex-Brazil), encouraging progress at Bara and Spin, and comparable strength at Coca-Cola FEMSA. Consolidated revenues and operating income showed solid comparable currency-neutral growth. However, results were tempered by a one-time accounting gain that inflated reported net income, meaningful underlying net income decline, continued underperformance and credit exposure in the Health division (notably Colombia institutional receivables and Mexico losses), OXXO Brazil operating losses, FX/financing headwinds, and lingering traffic/security effects in some Mexican regions. Management emphasized cost containment, capital discipline and continued focus on traffic recovery, while retaining cautious guidance for the back half of the year.Positive Updates
OXXO Mexico Revenue and Same-Store Sales Recovery
Total revenue growth of 8.3% YoY driven by same-store sales growth of 6.0% and 158 net new stores added during the quarter; average traffic improved materially vs. last year despite remaining slightly negative.
Negative Updates
Health Division Underperformance
Health revenues 22.2 billion pesos grew 0.9% YoY (6.5% currency-neutral) but gross profit decreased 10% and gross margin was 26.2% (mechanically impacted by a ~666 million peso reclassification); operating income fell 14.9% YoY (4.9% on a comparable basis) due to weak margins in Chile, continued losses in Mexico and institutional challenges in Colombia.
Read all updates
Q1-2026 Updates
Positive
Negative
OXXO Mexico Revenue and Same-Store Sales Recovery
Total revenue growth of 8.3% YoY driven by same-store sales growth of 6.0% and 158 net new stores added during the quarter; average traffic improved materially vs. last year despite remaining slightly negative.
Read all positive updates
Company Guidance
Guidance from the call was fairly specific: Q1 CapEx was Ps.6.2bn (~3% of revenues, down 29.5% YoY) but management expects CapEx to accelerate through the year and trend toward a more typical 5–6% of sales; ordinary dividends of Ps.15.2bn (Mar‑2026 to Mar‑2027, +4.5% per share) plus an extraordinary dividend of Ps.25.8bn were approved (total expected capital distributions ≈ Ps.41bn for Mar‑2026–Mar‑2027) and a separate 300m‑share buyback (part of 2025 returns) should complete in Q2; leverage is expected to finish the year slightly below a 2.0x net debt/EBITDA target absent opportunistic M&A, cost‑reduction benefits should begin to cycle in over the next three quarters, Spin losses are expected to decline beginning next quarter (and Spin metrics show ~11m active users and >100m monthly transactions), and management tempered optimism for H2 given macro uncertainty.Fomento Economico Mexicano Financial Statement Overview
Summary
Income Statement
58
Neutral
Balance Sheet
63
Positive
Cash Flow
70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 46.51B | 46.65B | 37.49B | 702.69B | 597.01B | 505.46B |
| Gross Profit | 18.91B | 18.95B | 15.42B | 279.51B | 241.52B | 206.18B |
| EBITDA | 5.91B | 6.40B | 4.20B | 72.18B | 91.95B | 69.95B |
| Net Income | 1.57B | 1.08B | 1.28B | 65.69B | 23.91B | 28.50B |
Balance Sheet | ||||||
| Total Assets | 44.42B | 44.15B | 40.84B | 805.86B | 798.82B | 737.50B |
| Cash, Cash Equivalents and Short-Term Investments | 6.41B | 7.10B | 8.78B | 191.84B | 83.49B | 121.82B |
| Total Debt | 14.42B | 14.29B | 12.29B | 232.90B | 285.06B | 252.94B |
| Total Liabilities | 28.10B | 25.88B | 22.56B | 427.49B | 461.01B | 402.38B |
| Stockholders Equity | 11.82B | 13.59B | 14.27B | 303.86B | 262.60B | 262.60B |
Cash Flow | ||||||
| Free Cash Flow | 2.55B | 1.61B | 1.38B | 11.56B | 40.14B | 52.79B |
| Operating Cash Flow | 4.76B | 3.94B | 3.48B | 49.68B | 72.58B | 73.09B |
| Investing Cash Flow | 1.46B | -114.32M | -1.59B | 132.29B | -46.43B | -46.17B |
| Financing Cash Flow | -5.94B | -5.10B | -4.03B | -92.55B | -35.90B | -36.99B |
Fomento Economico Mexicano Technical Analysis
Positive
127.12
Price Trends
124.78
Positive
118.18
Positive
108.16
Positive
Market Momentum
1.36
Positive
50.45
Neutral
21.14
Neutral
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 127.12 is below the 20-day moving average (MA) of 128.07, above the 50-day MA of 124.78, and above the 200-day MA of 108.16, indicating a neutral trend. The MACD of 1.36 indicates Positive momentum. The RSI at 50.45 is Neutral, neither overbought nor oversold. The STOCH value of 21.14 is Neutral, 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 |
|---|---|---|---|---|---|---|---|
80 Outperform | $49.33B | 16.26 | 17.19% | 4.28% | -0.41% | 13.36% | |
70 Outperform | $24.64B | 23.87 | 12.01% | 6.08% | 18.16% | 89.79% | |
65 Neutral | $168.76B | 17.13 | 8.12% | 1.65% | -0.33% | 18.34% | |
64 Neutral | $22.50B | 12.59 | 23.13% | 3.14% | -9.99% | ― | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
57 Neutral | $2.17B | 18.23 | 7.53% | 2.49% | 0.23% | -28.74% | |
57 Neutral | $8.03B | -4.00 | -19.15% | 4.64% | -1.30% | -312.85% |
* Consumer Defensive Sector Average
FMX
Fomento Economico Mexicano
126.76
43.32
51.92%
BUD
Anheuser-Busch Inbev Sa
86.14
29.78
52.84%
CCU
Compania Cervecerias Unidas SA
11.68
0.04
0.39%
STZ
Constellation Brands
130.38
-31.08
-19.25%
TAP
Molson Coors
41.55
-4.68
-10.12%
ABEV
Ambev SA
3.12
1.05
50.72%
Fomento Economico Mexicano Corporate Events
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...
FEMSA Brings QED Investors into Lending Unit to Accelerate Digital Credit Growth
Jun 8, 2026
On June 8, 2026, FEMSA announced that global fintech-focused venture capital firm QED Investors will make a strategic equity investment in FEMSA’s lending business unit, which forms a key pillar of its digital ecosystem alongside payments an...
FEMSA Details Governance and Sustainability Practices in May 2026 Disclosure
May 28, 2026
On May 28, 2026, FEMSA filed a Form 6-K outlining its adherence to a Code of Principles and Best Corporate Governance Practices, emphasizing the central role of shareholders’ meetings as the company’s supreme decision-making body. The ...
FEMSA Posts Solid 1Q 2026 Results and Overhauls Segment Reporting
Apr 30, 2026
On April 30, 2026, FEMSA reported its first-quarter 2026 results, unveiling a refreshed reporting structure that separates OXXO Mexico from a new Americas Mobility segment to improve transparency around its growing international and fuel operatio...
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.