Fomento Economico Mexicano (FMX) AI Stock Analysis

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Fomento Economico Mexicano

(NYSE:FMX)

Rating:67Neutral

Price Target:

$98.00

▲(9.02%Upside)

Fomento Economico Mexicano's overall stock score reflects strong financial performance and high dividend yield, partially offset by bearish technical indicators and challenges highlighted in the earnings call, particularly in the Mexican market. The high valuation poses additional risk, but the company's expansion efforts and strategic initiatives offer potential upside.

Fomento Economico Mexicano (FMX) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$18.89B

Dividend Yield4.89%

Average Volume (3M)654.40K

Price to Earnings (P/E)33.8

Beta (1Y)0.33

Revenue Growth-2.73%

EPS Growth-37.93%

CountryUS

Employees394,010

SectorUtilities

Sector Strength80

IndustryBeverages - Alcoholic

Share Statistics

EPS (TTM)0.41

Shares Outstanding214,845,300

10 Day Avg. Volume962,370

30 Day Avg. Volume654,396

Financial Highlights & Ratios

PEG Ratio7.09

Price to Book (P/B)1.91

Price to Sales (P/S)0.00

P/FCF Ratio925.31

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$110.75

Price Target Upside23.21% Upside

Rating ConsensusHold

Number of Analyst Covering4

Fomento Economico Mexicano Business Overview & Revenue Model

Company DescriptionFomento Economico Mexicano, S.A.B. de C.V. (FMX), commonly known as FEMSA, is a leading Mexican multinational company with diverse operations across various sectors. It is primarily engaged in the retail and beverage industries, operating the largest convenience store chain in Mexico, OXXO. FEMSA also has significant interests in the beverage sector through its ownership of Coca-Cola FEMSA, the largest franchise bottler of Coca-Cola products in the world. Additionally, FEMSA has a health division that includes operations in the pharmacy sector.

How the Company Makes MoneyFEMSA generates revenue through multiple channels. The company earns a substantial portion of its income from its retail division, primarily through OXXO stores, which offer convenience products and services across numerous locations in Mexico and Latin America. Another major revenue stream is Coca-Cola FEMSA, which produces, markets, and distributes Coca-Cola beverages in various countries, benefiting from exclusive bottling agreements with The Coca-Cola Company. FEMSA's health division also contributes to its earnings through retail pharmacy sales. The company's growth and earnings are supported by strategic partnerships with The Coca-Cola Company and its ability to expand its retail footprint into new markets.

Fomento Economico Mexicano Earnings Call Summary

Earnings Call Date:Jul 28, 2025

(Q2-2025)

% Change Since: -8.83%|

Next Earnings Date:Oct 24, 2025

Earnings Call Sentiment Neutral

The call presented a mixed outlook. While there were notable achievements in the growth of Spin by OXXO and expansion efforts in Proximity Americas and Europe, significant challenges remain in the Mexican market, impacting net income and operating results in multiple segments.

Q2-2025 Updates

Positive Updates

Spin by OXXO Growth

Spin by OXXO has created more than 14.5 million accounts, with over 9.4 million active in the last 56 days. Customer engagement is strong, with 3.5 million monthly users averaging over 21 transactions per month.

Spin Premia and OXXO Sales Integration

Spin Premia has over 58 million accounts, with 26.6 million active in the last 90 days. Nearly 46% of OXXO sales are identified through the loyalty program, indicating strong customer integration.

Proximity Americas Expansion

Proximity Americas added 334 net new stores in the quarter, with plans for continued expansion, especially in the U.S. OXXO USA conversion efforts show promising early results.

Valora's Solid Performance

Valora in Europe reported a 31.4% increase in revenues, driven by strong retail performance in Switzerland and efficient cost management, resulting in a 54.4% increase in operating income.

Negative Updates

Challenges in Mexican Market

FEMSA faced a challenging consumer environment in Mexico, impacting both Proximity and Coca-Cola FEMSA, with traffic declining by 6.6% and same-store sales slightly declining by 0.4%.

Significant Net Income Decline

Net consolidated income decreased by 64.3% to MXN 5.6 billion, primarily due to a MXN 10 billion swing in foreign exchange losses and lower interest income.

OXXO Health Underperformance

The health division, particularly in Mexico, faced challenges with same-store sales declines and closure of 432 underperforming stores, resulting in a 30 basis point operating margin dilution.

Coca-Cola FEMSA Volume Decline

Coca-Cola FEMSA reported a nearly 10% volume decline in Mexico and Central America due to adverse weather conditions and a tougher demand environment.

Company Guidance

During FEMSA's Second Quarter 2025 Results Conference Call, substantial guidance was provided concerning Spin by OXXO's performance and strategic plans. Spin by OXXO has successfully created over 14.5 million accounts, with 9.4 million being active in the past 56 days, demonstrating significant market penetration across various municipalities. The customer base is notably young and dynamic, with two-thirds under 45 and more than 50% women, highlighting Spin's role in financial inclusion. Monthly, 3.5 million users conduct over 21 transactions on average, with 20% linked to offshore activities, indicating the platform's utility. Spin Premia boasts over 58 million accounts, with 26.6 million showing transaction activity in the last 90 days. More than 20 million OXXO customers benefit from Spin Premia monthly, with an average of over 7 transactions per active user. Spin Negocios, including NetPay and OXXO Pay, extends the platform to nearly 20,000 merchants, processing almost MXN 12 billion monthly. Spin has improved its cash burn, reducing it from MXN 4 billion to around MXN 3 billion annually, thanks to initiatives like renegotiating commercial terms and connecting directly to SPEI, cutting costs to serve by 48% compared to last year. This strategic focus on financial sustainability and expanding financial services is central to Spin's growth trajectory.

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

Very Positive

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

Positive

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

Very Positive

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

Negative

Last Price89.89

Price Trends

50DMA

101.14

Negative

100DMA

99.45

Negative

200DMA

92.98

Negative

Market Momentum

MACD

-2.19

Positive

RSI

26.95

Positive

STOCH

12.00

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FMX, the sentiment is Negative. The current price of 89.89 is below the 20-day moving average (MA) of 98.54, below the 50-day MA of 101.14, and below the 200-day MA of 92.98, indicating a bearish trend. The MACD of -2.19 indicates Positive momentum. The RSI at 26.95 is Positive, neither overbought nor oversold. The STOCH value of 12.00 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 0 New Risks

Fomento Economico Mexicano Peers Comparison

Overall Rating

UnderperformOutperform

Sector (67)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BUD	74 Outperform	$130.69B	22.92	7.31%	1.58%	0.58%	9.94%
SAM	73 Outperform	$2.31B	29.83	8.15%	―	2.46%	-7.28%
CCU	71 Outperform	$2.15B	12.38	11.33%	3.87%	6.18%	61.39%
ABEV	71 Outperform	$37.26B	14.41	15.09%	1.93%	1.25%	-13.02%
TAP	69 Neutral	$10.25B	10.18	7.90%	3.69%	-5.17%	-0.74%
Sector *	67 Neutral	$16.88B	17.09	4.71%	3.57%	4.63%	5.80%
FMX	67 Neutral	$18.89B	33.84	6.88%	4.89%	-2.73%	-37.93%

* Utilities Sector Average

Performance Comparison

FMX

Fomento Economico Mexicano

89.89

-14.54

-13.92%

BUD

Anheuser-Busch Inbev Sa

66.54

6.00

9.91%

SAM

Boston Beer

211.80

-65.29

-23.56%

CCU

Compania Cervecerias Unidas SA

11.71

1.07

10.06%

TAP

Molson Coors

49.32

-1.79

-3.50%

ABEV

Ambev SA

2.30

0.39

20.42%

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.Date of analysis: Jul 31, 2025