KOF - Coca-Cola FEMSA: Still A Buy After A Bubbly Rally Q4 Earnings On Tap
2024-02-20 00:58:43 ET
Summary
- Consumer Staples sector valuations are high, with Coca-Cola FEMSA trading at 18.7 times 2024 earnings estimates, leaving just a modest amount of intrinsic upside potential.
- Coca-Cola FEMSA is the largest bottler for The Coca-Cola Company outside the US, with strong profit strength and positive free cash flow.
- KOF stock has a bullish trend, with a history of beating EPS estimates and positive share-price reactions, but the valuation could become a risk.
- With high momentum and free cash flow strength, in addition to its high yield, I keep my buy rating heading into earnings this week.
- I outline key price levels to monitor on the chart.
Valuations continue to turn more stretched. While the Information Technology sector is the priciest across several metrics, the Consumer Staples space sells for a lofty 19.4 times forward operating earnings estimates, according to Goldman Sachs using FactSet data. A valuation premium is often deserved for defensive earnings growers that can withstand periods of economic distress, but investors should always reflect on how much is being paid for that safety net....
Coca-Cola FEMSA: Still A Buy After A Bubbly Rally, Q4 Earnings On Tap