FEMSA: Q4 Rebound In Proximity America's Growth Is Encouraging - Maintain Buy Rating

2025-03-02 10:00:00 ET

Summary

• Worries about stunted growth in FEMSA's OXXO convenience store chain were eased, as the Q4 report indicated a rebound.
• While Mexican stocks are not popular right now due to U.S. trade tariff concerns, FEMSA should have minimal direct exposure to any tariffs.
• Management is interested in increasing leverage, which is not only an indication of increased shareholder returns, but also management confidence.
• A weakening of the U.S. Dollar, which I suspect may occur, would benefit the NYSE listing for FEMSA.

I initiated coverage on Fomento Económico Mexicano, S.A.B. de C.V. ( FMX ) in early December after returning from a vacation in Mexico City. The company, more commonly known as FEMSA, operates a conglomerate of businesses ranging from soda bottling, to convenience store operations, to retail pharmacies. The company is based in Mexico City, but some of its segments operate in (or sell to) other select Latin American countries....

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