GMKKY - Gruma Offers An Interesting Mix Of Offense And Defense
- Gruma is a staple food provider in Mexico and offers revenue growth and operating leverage potential in the U.S. and Europe through premiumization, increased scale, and changing eating habits.
- Commodity inflation is a manageable risk, with the U.S. business fully hedged and pricing leverage in Mexico.
- Foodservice demand should rebound as pandemic-driven restrictions are lifted over time, and increased shelf space and premium assortment in the U.S. offers margin leverage opportunities.
- Mid-single-digit revenue and FCF growth and mid-teens ROICs support a near-term fair value 15% to 25% above today's price and decent prospective return thereafter.
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Gruma Offers An Interesting Mix Of Offense And Defense