Fomento Economico Mexicano (FMX) AI Stock Analysis

• Market Cap: $19.18B
• Dividend Yield: 4.85%
• Average Volume (3M): 1.05M
• Price to Earnings (P/E): 33.5
• Beta (1Y): 0.41
• Revenue Growth: -2.73%
• EPS Growth: -37.93%
• Country: US
• Employees: 394,010
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Beverages - Alcoholic
• EPS (TTM): 0.42
• Shares Outstanding: 214,845,300
• 10 Day Avg. Volume: 908,162
• 30 Day Avg. Volume: 1,054,483
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 2.40
• Enterprise Value/Revenue: 0.06
• Enterprise Value/Gross Profit: 0.14
• Enterprise Value/Ebitda: 0.52
• 1Y Price Target: $105.14
• Price Target Upside: 13.02% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 72 Outperform
• Price Target: $103.00 ▲(10.72% Upside)

Fomento Economico Mexicano's strong financial performance and strategic growth initiatives are key strengths, contributing to a stable outlook. However, technical indicators suggest potential overbought conditions, and valuation metrics indicate the stock may be expensive. Earnings call insights reveal both opportunities and challenges, particularly in the Mexican market. Overall, the stock presents a balanced risk-reward profile.

Fomento Economico Mexicano Business Overview & Revenue Model

Company Description

Fomento Económico Mexicano, S.A.B. de C.V., through its subsidiaries, operates as a bottler of Coca-Cola trademark beverages. The company produces, markets, and distributes Coca-Cola trademark beverages in Mexico, Guatemala, Nicaragua, Costa Rica, Panama, Colombia, Venezuela, Brazil, Argentina, and Uruguay. It also operates small-box retail chain stores in Mexico, Colombia, Peru, Chile, and Brazil under the OXXO name; retail service stations for fuels, motor oils, lubricants, and car care products under the OXXO GAS name in Mexico; and drugstores in Chile, Colombia, Ecuador, and Mexico under the Cruz Verde, Fybeca, SanaSana, YZA, La Moderna, and Farmacon names. In addition, the company is involved in the production and distribution of chillers, commercial refrigeration equipment, plastic boxes, food processing, and preservation and weighing equipment; and provision of logistic transportation, distribution and maintenance, point-of-sale refrigeration, and plastics solutions, as well as distribution platform for cleaning products and consumables. As of December 31, 2021, it operated 20,431 OXXO stores; 3,652 drugstores; and 567 OXXO GAS service stations. Fomento Económico Mexicano, S.A.B. de C.V. was founded in 1890 and is based in Monterrey, Mexico.

How the Company Makes Money

FMX generates revenue through multiple key streams, with its primary source being the production and sale of beverages, including soft drinks and bottled water. The company benefits from high-volume sales and economies of scale in its manufacturing processes. Additionally, FMX's retail operations, which encompass convenience stores and dining establishments, contribute significantly to its earnings through direct sales to consumers. Strategic partnerships with major brands and suppliers enhance its market presence and product offerings. Furthermore, FMX capitalizes on market expansion opportunities in international markets, allowing for diversified revenue generation. Overall, the combination of its beverage manufacturing and retail operations, along with strong brand partnerships, forms the backbone of FMX's revenue model.

Fomento Economico Mexicano Financial Statement Overview

Summary

Fomento Economico Mexicano exhibits strong revenue growth and solid profitability metrics, supported by effective cost management. The balance sheet shows stable leverage, with a healthy equity base. Cash flow generation is strong, although Free Cash Flow has seen a decline recently. Overall, the company is in a stable financial position with good growth potential, although careful management of leverage and cash flow is advisable.

Income Statement

The company shows strong revenue growth with a 16.95% increase from 2023 to the TTM period. Gross Profit Margin remains solid at 41.47% for TTM, reflecting efficient cost management. Net Profit Margin improved to 4.41% in TTM, indicating enhanced profitability. EBIT and EBITDA Margins are healthy at 8.87% and 11.01% respectively, showing stable operational performance.

Balance Sheet

The balance sheet indicates a stable equity ratio of 36.00% in TTM, suggesting good asset leverage. The Debt-to-Equity Ratio is 0.85, reflecting manageable debt levels. Return on Equity is moderate at 11.45%, showing decent returns for shareholders. The financial position is stable but slightly leveraged.

Cash Flow

The cash flow performance is robust, with a Free Cash Flow growth rate of -31.84% from 2023 to TTM. The Operating Cash Flow to Net Income Ratio is strong at 1.81, indicating efficient cash generation. The Free Cash Flow to Net Income Ratio is 0.47, which is satisfactory but indicates room for improvement.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	800.05B	781.59B	702.69B	673.20B	556.26B	492.97B
Gross Profit	331.87B	321.51B	279.51B	251.67B	213.71B	189.65B
EBITDA	88.13B	123.43B	109.03B	61.91B	56.90B	36.07B
Net Income	35.28B	26.73B	65.69B	23.91B	28.50B	4.12B
Balance Sheet
Total Assets	855.88B	851.54B	805.86B	798.62B	737.50B	684.64B
Cash, Cash Equivalents and Short-Term Investments	169.72B	183.05B	191.84B	83.49B	121.82B	107.89B
Total Debt	261.63B	256.30B	232.90B	280.64B	246.85B	241.81B
Total Liabilities	464.11B	470.40B	427.49B	459.96B	402.68B	377.45B
Stockholders Equity	308.15B	297.50B	303.86B	338.66B	334.82B	307.19B
Cash Flow
Free Cash Flow	16.48B	24.20B	11.56B	40.14B	52.79B	33.03B
Operating Cash Flow	63.77B	71.51B	49.68B	72.58B	73.09B	53.17B
Investing Cash Flow	-35.87B	-33.12B	132.29B	-46.43B	-46.17B	-31.37B
Financing Cash Flow	-82.59B	-84.05B	-92.55B	-35.90B	-36.99B	19.57B

Fomento Economico Mexicano Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 93.03
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 93.03 is above the 20-day moving average (MA) of 88.09, above the 50-day MA of 90.72, and above the 200-day MA of 92.47, indicating a bullish trend. The MACD of 0.61 indicates Negative momentum. The RSI at 60.20 is Neutral, neither overbought nor oversold. The STOCH value of 84.09 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FMX.

Fomento Economico Mexicano Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CCU	75 Outperform	2.22B	14.40	10.55%	3.81%	13.92%	32.69%
ABEV	75 Outperform	37.95B	14.40	15.95%	1.92%	-0.79%	-10.83%
BUD	75 Outperform	116.76B	16.09	7.48%	1.78%	-2.06%	21.03%
FMX	72 Outperform	$19.18B	33.51	6.88%	4.85%	-2.73%	-37.93%
TAP	66 Neutral	9.30B	9.34	7.72%	3.95%	-5.48%	-6.99%
STZ	60 Neutral	23.45B	-55.72	-6.09%	3.05%	-0.47%	-117.62%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%

Fomento Economico Mexicano Corporate Events

FEMSA to Fully Control OXXO Stores in Brazil After Ending Joint Venture

On September 4, 2025, FEMSA announced the termination of its joint venture with Raízen, S.A. in Brazil, allowing FEMSA to take full control of OXXO stores in the country. This strategic move aligns with FEMSA’s focus on expanding its retail operations in Brazil, a market with significant growth potential due to its large size and fragmented retail landscape. The separation agreement, which is cash-neutral, will see FEMSA assume the existing debt of the joint venture and is expected to close in the coming months, pending regulatory approvals.

FEMSA Supports BradyPLUS and Imperial Dade Merger

On August 11, 2025, FEMSA announced that BradyPLUS and Imperial Dade have agreed to merge through an all-equity transaction, which FEMSA supports. BradyPLUS, in which FEMSA holds a minority stake, and Imperial Dade, both operating in the U.S. janitorial, sanitation, and packaging sectors, aim to expand their geographic reach and enhance customer service through this merger. FEMSA will maintain a 19% stake in the new entity and have board representation, with the merger pending regulatory approval and expected to close in the coming months.

FEMSA Reports Mixed Q2 2025 Results Amidst Challenging Conditions

Fomento Económico Mexicano (FEMSA) reported its financial results for the second quarter of 2025, showing a 6.3% increase in total consolidated revenues and a 1.2% rise in income from operations compared to the same period in 2024. Despite challenges in Mexico due to a soft consumer environment and adverse weather, the company saw strong performance in its international operations, particularly in South America, aided by favorable currency conditions. The retail and beverage sectors outside Mexico showed promising growth, with initiatives in place to reverse traffic and volume trends and manage costs effectively in the second half of the year.

FEMSA Finalizes Logistics Divestiture to Grupo Traxión

On July 1, 2025, FEMSA announced the completion of its divestiture of certain logistics operations, previously disclosed in October 2024, to Grupo Traxión. The transaction, valued at 4,040 million Mexican pesos, involves FEMSA’s transportation management and contract logistics operations in Mexico, Colombia, and Brazil, excluding its LTL operations in Brazil. This strategic move allows FEMSA to streamline its operations and focus on its core business areas, potentially enhancing its market positioning and operational efficiency.