Coca-Cola FEMSA, S.A.B. de C.V. (KOF): A Good Stock To Sink Your Teeth Into?

Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) has been upgraded by Morgan Stanley, which now rates the stock as Equal-Weight versus Underweight prior rating, according to a note issued on December 13. Analysts at Credit Suisse, shed their positive views on November 17 by lowering it fromOutperform to Neutral. The stock lost favor of Citigroup analysts who expressed their lack of confidence in it using a downgrade from Buy to Neutral on June 13. JP Morgan analysts came out with bullish views on May 12 when the call was made. They think the stock is now Overweight compared to to their prior call for Neutral.

KOF stock rose 0.63% in recent trade and currently has a stock-market value of $4.49B. The shares finished at $60.99, after trading as low as $60.66 earlier in the session. It hit an intraday high Wednesday at $61.07. Trading activity significantly weakened as the volume at ready counter decreased to 51,336 shares versus 85,900 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 78,600 shares. The stock is now 11.85% above against its bear-market low of $54.53 on June 20, 2018. It has retreated -15.28% since it’s 52-week high of $70.31 reached in March. Now the market price is down -11.31% on the year and up 0.25% YTD.

Wall Street’s most bullish Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) analysts are predicting the share price to blow past $100.21 per share during the next 12 months. The current median share price forecast by them is $73.59, suggesting that the stock could increase 20.66% in that time frame. The average price target of $74.56 calls for a nearly 22.25% increase in the stock price.

Coca-Cola FEMSA, S.A.B. de C.V. (KOF)’s 50 day simple moving average (SMA 50) price is $62.36 and its 200-day simple moving average (SMA 200) price is $60.71. The company’s stock currently has a total float of 0 shares. Its weekly volatility is hovering around 2.38% and felt 2.12% volatility in price over a month. On the upside, the share price will test short term resistance at around $61.15. On a downside, the stock is likely to find some support, which begins at $60.74. The failure to get near-term support could push it to $60.5.

When looking at valuations, Coca-Cola FEMSA, S.A.B. de C.V. (KOF) has a cheap P/E of 23.76x as compared to industry average of 29.89x. Moreover, it trades for 17.79 times the next 12 months of expected earnings. Also, it is trading at rather expensive levels at just over 2.18x price/book and 0.48x price/sales. Compared to others, Coca-Cola FEMSA, S.A.B. de C.V. is in a different league with regards to profitability, having net margins of -9.3%. To put some perspective around this, the industry’s average net margin is 6.96%. KOF’s ROE is -14.5%, which is also considerably worse than the industry’s ROE of 14.33%. It’s also very liquid in the near term, with a current ratio of 1.5. The stock has a debt/capital of 0.8.

KOF last reported earnings that receded expectations. The company raked in $0.69 per share, -97.41% change on the same period last year. That was worse than consensus for $0.94. Revenue for the recent quarter stood at $2.61 billion, down -10% on last year and below the $2.64 billion predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $2.29 billion to $2.62 billion, which should be compared with $0 generated last year. EPS is seen in a range of $0.58 to $0.75, against the $0.76 reported a year ago.