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Coca Cola Femsa SAB De CV (KOF)
NYSE:KOF

Coca Cola Femsa SAB De CV (KOF) AI Stock Analysis

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Coca Cola Femsa SAB De CV

(NYSE:KOF)

74Outperform
Coca Cola Femsa's stock demonstrates strong financial performance with substantial revenue and profit growth, solid operational efficiency, and a robust balance sheet. Technical indicators show positive momentum, although caution is advised due to near overbought levels. Valuation appears fair, with a reasonable P/E ratio and attractive dividend yield. The earnings call highlighted strengths in certain regions but also challenges in others, impacting the overall outlook.

Coca Cola Femsa SAB De CV (KOF) vs. S&P 500 (SPY)

Coca Cola Femsa SAB De CV Business Overview & Revenue Model

Company DescriptionCoca-Cola FEMSA, S.A.B. de C.V., a franchise bottler, produces, markets, sells, and distributes Coca-Cola trademark beverages. The company offers sparkling beverages, including colas and flavored sparkling beverages; and waters and other beverages, such as juice drinks, coffee, teas, milk, value-added dairy products, sports and energy drinks, and plant-based drinks. It provides a portfolio of products through retail outlets, such as wholesale supermarkets, discount stores, and convenience stores; retailers, such as restaurants and bars, as well as stadiums, auditoriums, and theaters; points-of-sale outlets; and home delivery, supermarkets, and other locations. In addition, the company distributes and sells Heineken beer products in its Brazilian territories. It operates in Mexico, Guatemala, Nicaragua, Costa Rica, Panama, Colombia, Brazil, Argentina, and Uruguay. The company was founded in 1979 and is headquartered in Mexico City, Mexico. Coca-Cola FEMSA, S.A.B. de C.V. is a subsidiary of Fomento Economico Mexicano, S.A.B. de C.V.
How the Company Makes MoneyCoca-Cola Femsa generates revenue primarily through the sale of bottled beverages. The company earns money by producing and distributing a variety of Coca-Cola branded drinks, such as Coca-Cola, Sprite, Fanta, and other products. Its revenue streams are primarily derived from the volume of beverages sold, which varies based on consumer demand within its operational regions. Coca-Cola Femsa benefits from its strategic partnerships, notably with The Coca-Cola Company, which provides it with access to a broad portfolio of products and marketing support. Additionally, economies of scale in production and distribution, along with strategic acquisitions and a robust distribution network, contribute significantly to the company's earnings.

Coca Cola Femsa SAB De CV Financial Statement Overview

Summary
Coca Cola Femsa has shown strong financial performance with significant revenue and profit growth, effective cost management, and operational efficiency. The balance sheet is solid with moderate leverage, though cash flow data is limited, historical performance is robust.
Income Statement
85
Very Positive
Coca Cola Femsa demonstrated robust revenue growth of 14.15% YoY in 2024, driven by strong market demand. Gross profit margin improved to 46.01%, reflecting effective cost management. Net profit margin also increased to 8.48%, indicating enhanced profitability. EBIT and EBITDA margins were healthy at 14.35% and 18.41% respectively, showing strong operational performance. The company has shown consistent growth in revenues and profitability over the years.
Balance Sheet
78
Positive
The balance sheet remains solid with a debt-to-equity ratio of 0.54, suggesting moderate leverage. Return on equity (ROE) improved to 16.55%, indicating effective utilization of equity. The equity ratio stands at 46.57%, reflecting a healthy capital structure. The company has maintained a stable equity base, though total debt levels have increased slightly compared to the previous year, necessitating careful management.
Cash Flow
60
Neutral
Cash flow analysis is limited due to missing current year data, but historical performance shows strong free cash flow generation, with a significant free cash flow growth rate of 21.98% in 2023. The company has maintained a positive free cash flow to net income ratio, ensuring sufficient cash generation to support operations. Attention to future cash flow stability is crucial as recent data is unavailable.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
266.57B279.79B245.09B226.74B194.80B183.62B
Gross Profit
121.89B128.74B110.86B100.30B88.60B82.81B
EBIT
37.75B40.14B34.35B30.84B27.40B25.24B
EBITDA
40.41B52.85B43.82B40.45B37.33B32.44B
Net Income Common Stockholders
21.80B23.73B19.54B19.03B15.71B10.31B
Balance SheetCash, Cash Equivalents and Short-Term Investments
14.68B32.78B31.06B40.28B47.25B43.50B
Total Assets
107.75B307.99B273.52B278.00B271.57B263.07B
Total Debt
19.15B76.88B67.73B80.81B87.29B88.78B
Net Debt
5.97B44.10B36.67B40.53B40.04B45.29B
Total Liabilities
40.19B157.44B139.81B146.12B144.00B140.61B
Stockholders Equity
65.15B143.43B127.03B125.38B121.55B116.87B
Cash FlowFree Cash Flow
1.06B16.65B21.66B17.76B22.73B60.35B
Operating Cash Flow
2.37B42.44B42.29B35.49B32.72B70.29B
Investing Cash Flow
-1.44B-23.39B-20.07B-19.60B-9.55B-21.02B
Financing Cash Flow
-800.31M-19.64B-26.35B-20.85B-20.26B834.00M

Coca Cola Femsa SAB De CV Technical Analysis

Technical Analysis Sentiment
Positive
Last Price97.68
Price Trends
50DMA
89.74
Positive
100DMA
83.82
Positive
200DMA
83.99
Positive
Market Momentum
MACD
2.41
Negative
RSI
65.63
Neutral
STOCH
57.66
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KOF, the sentiment is Positive. The current price of 97.68 is above the 20-day moving average (MA) of 93.93, above the 50-day MA of 89.74, and above the 200-day MA of 83.99, indicating a bullish trend. The MACD of 2.41 indicates Negative momentum. The RSI at 65.63 is Neutral, neither overbought nor oversold. The STOCH value of 57.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KOF.

Coca Cola Femsa SAB De CV Risk Analysis

Coca Cola Femsa SAB De CV disclosed 27 risk factors in its most recent earnings report. Coca Cola Femsa SAB De CV 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

Coca Cola Femsa SAB De CV Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$40.62B26.4417.43%2.42%11.73%-15.34%
KDKDP
77
Outperform
$46.72B31.216.13%2.63%3.95%-28.73%
74
Outperform
$11.93B22.1144.38%0.43%3.69%60.51%
KOKOF
74
Outperform
$5.18B15.9717.94%2.97%8.74%16.30%
KOKO
73
Outperform
$309.47B29.4741.86%2.71%1.96%-0.45%
64
Neutral
$9.21B14.614.29%186.43%3.98%5.57%
63
Neutral
$12.36B20.07-3.43%1.14%29.32%-100.27%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
KOF
Coca Cola Femsa SAB De CV
97.68
1.29
1.34%
COKE
Coca-Cola Bottling Co Consolidated
1,369.02
551.61
67.48%
KO
Coca-Cola
71.91
11.96
19.95%
PRMB
Primo Brands
32.52
14.42
79.67%
KDP
Keurig Dr Pepper
34.40
1.56
4.75%
CCEP
Coca-Cola Europacific Partners
87.88
18.35
26.39%

Coca Cola Femsa SAB De CV Earnings Call Summary

Earnings Call Date: Apr 23, 2025 | % Change Since: 0.98% | Next Earnings Date: Jul 28, 2025
Earnings Call Sentiment Neutral
While the company demonstrated strong revenue and profit growth, particularly in the South America division, challenges in Mexico and Central America, increased competitive pressures, and higher operational costs offset some of these gains. Sustainability efforts and operational efficiencies provided positive momentum, but the overall environment remains challenging.
Highlights
Revenue and Profit Growth
Despite a 2.2% decline in consolidated volume, total revenues grew 10% to MXN70.2 billion, and gross profit increased 12% to MXN31.8 billion, with a margin expansion of 80 basis points to 45.4%.
South America Division Performance
Volumes in the South America division increased 1%, with significant growth in Brazil, Argentina, and Uruguay. Revenues increased 17.4%, and gross profit rose 22.8%, leading to a margin expansion of 190 basis points to 42.5%.
Sustainability Achievements
Increased renewable energy use to 84%, improved water efficiency, and diverted 99% of operational waste from landfills while strengthening community support programs.
Operational Efficiencies
Adjusted EBITDA grew 11% to reach MXN13.3 billion, and EBITDA margin expanded 20 basis points to 18.9%, driven by cost and expense controls.
Lowlights
Volume Decline in Key Markets
Consolidated volume declined 2.2% year-on-year, with notable declines in Mexico and Colombia, affecting overall performance.
Mexico and Central America Challenges
Volumes declined 4.6% in the Mexico and Central America division, with a 5% decrease in operating income and a 140 basis point contraction in operating margin.
Increased Competitive Intensity
Increased promotional activities across the market led to heightened competitive intensity, particularly affecting Mexico's performance.
Higher Operating Expenses
Operating margin contracted by 30 basis points to 13.2% due to higher operating expenses such as freight, labor, and maintenance.
Company Guidance
During Coca-Cola FEMSA's first quarter 2025 conference call, the company provided guidance on its financial performance and strategic initiatives. The company reported a 2.2% decline in consolidated volume year-on-year to 986.5 million unit cases, with notable decreases in Mexico and Colombia, offset by growth in Brazil, Argentina, Uruguay, and Guatemala. Despite the volume decline, total revenues grew 10% to MXN70.2 billion, aided by favorable currency translation and revenue management initiatives, with a currency neutral increase of 5.9%. Gross profit rose by 12% to MXN31.8 billion, resulting in an 80 basis point margin expansion to 45.4%, driven by lower sweetener costs and raw material hedging. Operating income increased 7.3% to MXN9.2 billion, though operating margin contracted by 30 basis points to 13.2% due to higher expenses. Adjusted EBITDA rose 11% to MXN13.3 billion, with a 20 basis point margin expansion to 18.9%. The company also highlighted operational strategies, including promotional activities and supply chain improvements in Mexico, where volumes declined 5.4%. In Guatemala, volumes increased 1.9% amid macroeconomic challenges, while Brazil saw a resilient 2.5% volume growth. The call emphasized Coca-Cola FEMSA's adaptability in navigating uncertainties and its focus on long-term strategic goals, including sustainability efforts showcased in the company's recent integrated annual report.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.