Coca-Cola Femsa SAB de (NYSE:KOF) Stock

Coca-Cola Femsa

Coca-Cola Femsa, a subsidiary of Femsa, is the largest franchise bottler of Coca-Cola in volume terms. The company purchases beverage concentrates and syrup from Coca-Cola, which it then processes and packages for distribution through modern trade, traditional trade, and the on-premises channel. Mexico and Brazil make up 80% of total volume and sales, with the rest from other Central and South American countries, including Panama, Guatemala, Uruguay, and Argentina. Femsa and Coca-Cola hold 47% and 28% economic interests in Coca-Cola Femsa through nonpublicly traded A and D shares, respectively, while controlling 56% and 33% of the voting power.

Coca Cola Femsa S.A.B. de C.V. American Depositary Shares, each representing 10 Units (each Unit consists of 3 Series B Shares and 5 Series L Shares)

Coca-Cola Femsa SAB de CV

Bank of America Securities analyst Bryan D. Spillan remains bullish on The Coca-Cola Company (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KO#NYSE">KO</a>) and Monster Beverage Corporation (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MNST#NASDAQ">MNST</a>), citing resilient growth, strategic tailwinds, and improving fundamentals across the broader Coke system <a target="_blank" href="https://www.benzinga.com/analyst-stock-ratings" rel="noreferrer noopener">despite near-term macro volatility</a>.
In a recent report on The Coca-Cola Co. and its global system of publicly traded bottlers (incl. Monster Energy), BofA Securities said the investment case for giants like The Coca-Cola Company and Monster Beverage Corporation remains robust, fueled by strong consumer demand.
Coca-Cola Company: The analyst presented a detailed overview of this beverage giant&#8217;s bottlers, who contribute 55% of global volume.
Also Read: <a target="_blank" href="https://www.benzinga.com/25/05/45656046/us-nonalcoholic-beverage-sector-focuses-on-revenue-growth-as-functional-trends-drive-value-says-analyst-covering-coca-cola-kdp-more" rel="noreferrer noopener">Less Sip, More Profit: Beverage Giants Thrive Without Pouring More</a>
While second-quarter volume may face temporary softness, the analyst writes the second half of 2025 looks favorable for Coca-Cola&#8217;s defensive profile, with potential upside in first-half for underperformers like Coca Cola Femsa S.A.B. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KOF#NYSE">KOF</a>), supported by solid fundamentals and coordinated strategy across the Coke System.
BofA Securities notes that Coca-Cola HBC&#8217;s strong growth trajectory remains intact despite a more volatile macro backdrop, with the company gaining 150 bps of NARTD&nbsp;(non-alcoholic ready-to-drink) share in 2024 and nearly 300 bps over the past three years.
Solid revenue trends are driving high-single-digit EBIT and roughly 10% EPS growth, supported by a robust balance sheet that offers flexibility for M&amp;A or increased shareholder returns.
Meanwhile, Coca-Cola Europacific Partners is set up for a stronger second half after lapping a soft summer in 2024, with longer-term tailwinds from rising per capita consumption and income growth in Indonesia and the Philippines expected to support future expansion alongside stable European operations.
BofA Securities highlights that Coca-Cola&#8217;s sustained ~5% organic sales growth, driven by a healthy mix of volume and pricing, continues to outpace multinational peers, though this strength doesn&#8217;t appear fully priced into the stock.
The analyst maintained the Buy rating on the stock with a price forecast of $77.
Monster Beverage: Monster Beverage is also showing signs of recovery, with U.S. volumes rebounding after last year&#8217;s slowdown and international margins trending higher, aided by pricing and steady U.S. demand.
Spillan reiterated the Buy rating on the stock, with a price forecast of $66.
The analyst assigns a premium valuation to Monster Beverage shares relative to large-cap beverage peers and broader consumer staples, citing the company&#8217;s consistently strong growth profile and attractive margin structure as justification.
However, the note outlines several downside risks, including a maturing category that may be losing market share, weaker-than-expected impact from innovation, slower international growth, investor rotation away from defensive stocks, currency headwinds, and a less robust sales outlook for the Bang brand over the medium term.
Price Action: MNST shares are trading lower by 0.56% to $62.68 at last check Wednesday, while KO shares are trading lower by 0.44% to $72.03.
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Coke, Monster Still Sizzle Amid Strong Demand And Tailwinds: Analyst

The Aluminium Association of Canada (AAC) has condemned the U.S. government's move to impose a 50% tariff on Canadian <a target="_blank" href="https://www.benzinga.com/topic/aluminum" rel="noreferrer noopener">aluminum</a>, calling it a protectionist misfire that risks destabilizing North America's integrated manufacturing base and driving higher inflation across key sectors.
"A 50% tariff on Canadian aluminum will suppress demand across the continent — whether the metal is produced in Canada or the U.S.," Jean Simard, AAC's president and CEO, <a target="_blank" href="https://aluminium.ca/wp-content/uploads/2025/06/AAC_PRESS-RELEASE_US-Tariffs_50_June-3-2025_FINAL.pdf" rel="noreferrer noopener">said</a> in a press release.
"It will impact workers on both sides of the border and disrupt key sectors including defense, construction, and automotive," he stated.
The tariff, enacted last Wednesday following an executive order from President Donald Trump, effectively prices Canadian exports out of the U.S. market at $1,349.50 per metric ton. Simard warned that the move may force Canadian producers to reorient trade toward the European Union and away from their most critical industrial partner.
Food packaging is among the industries most exposed to these tariffs, as large companies such as Campbell Soup (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/CPB#NASDAQ">CPB</a>) and Coca-Cola (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KO#NYSE">KO</a>) heavily rely on aluminum for their products.
The domestic Can Manufacturers Institute (CMI) also responded to Trump's decision, pointing out how aluminum and tinplate steel tariffs would hurt American families.
"Doubling the steel tariff will further increase the cost of canned goods at the grocery store," CMI president Robert Budway <a target="_blank" href="https://www.cancentral.com/can-manufacturers-institute-opposes-president-trumps-doubling-of-steel-tariffs/" rel="noreferrer noopener">said</a> on May 30. "These metal tariffs put our nation's food security at risk."
Nine domestic mill production lines have closed since the original 2018 tariffs on tin mill steel, leaving only three operational facilities. Thus, the domestic industry relies on roughly 80% of tin mill steel imports and a significant portion of aluminum.
Canada annually ships 2.7 million metric tons of aluminum to the U.S., much of which is transformed into beverage cans, canned food containers, and consumer packaging.
That raw material supports over 700,000 American manufacturing jobs, while Canada's aluminum sector directly employs 9,500 workers. Combined, the binational aluminum value chain contributes more than $228 billion annually to the U.S. economy.
Thanks to its abundant hydropower, Canada produces low-carbon aluminum at a cost and emissions profile that is far below that of many of its global competitors. That energy benefit is enormous — equivalent to 40 million megawatt-hours per year, or the annual output of four Hoover Dams.
Simrad noted that the Canadian industry supports the U.S. goal of increasing domestic aluminum production capacity from 50% to 80% of national demand, but added that tariffs undermine the investment certainty needed to build that capacity.
"Even if U.S. output doubles, it will still be a net importer," he said.
Instead, the AAC and CMI urge the U.S. to target the real threat: subsidized overcapacity from China. Canada already leads the world in aluminum traceability and anti-dumping enforcement. "Canadian aluminum is not — and will not be — a backdoor for unfair trade," Simard stated. "Undermining a trusted partner only weakens the foundation we both stand on."
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ABEV

Coca-Cola European Partners plc Ordinary Shares

CCEP

Fomento Economico Mexicano S.A.B. De C.V.

HEINY

US Aluminum Tariffs Risk Supply Chain And Food Security, Industry Insiders Warn

UBS analyst Rodrigo Alcantara maintains Coca-Cola Femsa SAB de (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KOF#NYSE">KOF</a>) with a Buy and raises the price target from $106 to $109.

UBS Maintains Buy on Coca-Cola Femsa SAB de, Raises Price Target to $109

Coca-Cola Femsa (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KOF#NYSE">KOF</a>) reported quarterly earnings of $1.20 per share which missed the analyst consensus estimate of $1.37 by 12.41 percent. This is a 14.29 percent decrease over earnings of $1.40 per share from the same period last year. The company reported quarterly sales of $3.43 billion which missed the analyst consensus estimate of $3.45 billion by 0.52 percent. This is a 8.70 percent decrease over sales of $3.76 billion the same period last year.

Earnings

Earnings Misses

Coca-Cola Femsa Q1 EPS $1.20 Misses $1.37 Estimate, Sales $3.43B Miss $3.45B Estimate

JP Morgan analyst Lucas Ferreira maintains Coca-Cola Femsa SAB de (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KOF#NYSE">KOF</a>) with a Overweight and raises the price target from $107 to $110.

JP Morgan Maintains Overweight on Coca-Cola Femsa SAB de, Raises Price Target to $110

Barclays analyst Benjamin Theurer maintains Coca-Cola Femsa SAB de (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KOF#NYSE">KOF</a>) with a Overweight and raises the price target from $99 to $105.

Barclays Maintains Overweight on Coca-Cola Femsa SAB de, Raises Price Target to $105

Barclays analyst Benjamin Theurer maintains Coca-Cola Femsa SAB de (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KOF#NYSE">KOF</a>) with a Overweight and lowers the price target from $110 to $108.

Barclays Maintains Overweight on Coca-Cola Femsa SAB de, Lowers Price Target to $108

Top Wall Street analysts changed their outlook on these top names. For a complete view of all analyst rating changes, including upgrades and downgrades, please see our <a href="https://www.benzinga.com/analyst-stock-ratings">analyst ratings page</a>.
<ul>
<li>Citigroup analyst Renata Cabral upgraded the rating for Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KOF#NYSE">KOF</a>) from Neutral to Buy and raised the price target from $93 to $102. Coca-Cola Femsa shares closed at $84.40 on Monday. <a href="https://www.benzinga.com/quote/MSFT/analyst-ratings">See how other analysts view this stock</a>.</li>
<li>Janney Montgomery Scott analyst Sean Milligan upgraded the rating for First Solar, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/FSLR#NASDAQ">FSLR</a>) from Neutral to Buy and announced a $260 price target. First Solar shares closed at $205.03 on Monday. <a href="https://www.benzinga.com/quote/MSFT/analyst-ratings">See how other analysts view this stock</a>.</li>
<li>Jefferies analyst Julien Dormois upgraded Koninklijke Philips N.V. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PHG#NYSE">PHG</a>) from Underperform to Hold. Philips shares closed at $26.62 on Monday. <a href="https://www.benzinga.com/quote/MSFT/analyst-ratings">See how other analysts view this stock</a>.</li>
<li>Raymond James analyst Steven Seedhouse upgraded ProQR Therapeutics N.V. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PRQR#NASDAQ">PRQR</a>) from Outperform to Strong Buy and boosted the price target from $6 to $14. ProQR Therapeutics shares closed at $3.31 on Monday. <a href="https://www.benzinga.com/quote/MSFT/analyst-ratings">See how other analysts view this stock</a>.</li>
<li>Barclays analyst Adam Seiden upgraded the rating for Summit Materials, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SUM#NYSE">SUM</a>) from Equal-Weight to Overweight and raised the price target from $45 to $52. Summit Materials shares closed at $45.63 on Monday. <a href="https://www.benzinga.com/quote/MSFT/analyst-ratings">See how other analysts view this stock.</a></li>
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Citigroup analyst Renata Cabral upgrades Coca-Cola Femsa SAB de (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KOF#NYSE">KOF</a>) from Neutral to Buy and raises the price target from $93 to $102.

Citigroup Upgrades Coca-Cola Femsa SAB de to Buy, Raises Price Target to $102

Earnings Beats

Coca-Cola Femsa Reported Q3 2024 GAAP EPS $1.47 Beats $1.40 Estimate, Sales $3.680B Beat $3.418B Estimate

Coca-Cola Femsa (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KOF#NYSE">KOF</a>) is set to give its latest quarterly earnings report on Friday, 2024-10-25. Here's what investors need to know before the announcement.
Analysts estimate that Coca-Cola Femsa will report an earnings per share (EPS) of $1.35. 
Anticipation surrounds Coca-Cola Femsa's announcement, with investors hoping to hear about both surpassing estimates and receiving positive guidance for the next quarter.
New investors should understand that while earnings performance is important, market reactions are often driven by guidance.
<h3>Earnings Track Record</h3>
Last quarter the company beat EPS by $0.03, which was followed by a 0.0% drop in the share price the next day.
Here's a look at Coca-Cola Femsa's past performance and the resulting price change:

<table>
<thead>
<tr>
<th>Quarter</th>
<th>Q2 2024</th>
<th>Q1 2024</th>
<th>Q4 2023</th>
<th>Q3 2023</th>
</tr>
</thead>
<tbody>
<tr>
<td>EPS Estimate</td>
<td>1.52</td>
<td>1.19</td>
<td>1.44</td>
<td>1.28</td>
</tr>
<tr>
<td>EPS Actual</td>
<td>1.55</td>
<td>1.40</td>
<td>1.47</td>
<td>1.50</td>
</tr>
<tr>
<td>Price Change %</td>
<td>3.0%</td>
<td>3.0%</td>
<td>-2.0%</td>
<td>-1.0%</td>
</tr>
</tbody>
</table>

<img src="https://www.benzinga.com/files/images/story/2024/1729778466_0.png" alt="eps graph" />
<h3>Tracking Coca-Cola Femsa's Stock Performance</h3>
Shares of Coca-Cola Femsa were trading at $85.07 as of October 23. Over the last 52-week period, shares are up 13.22%. Given that these returns are generally positive, long-term shareholders are likely bullish going into this earnings release. 
<h3>Insights Shared by Analysts on Coca-Cola Femsa</h3>
For investors, grasping market sentiments and expectations in the industry is vital. This analysis explores the latest insights regarding Coca-Cola Femsa.
The consensus rating for Coca-Cola Femsa is Outperform, based on 1 analyst ratings. With an average one-year price target of $110.0, there's a potential 29.31% upside.
<h3>Analyzing Ratings Among Peers</h3>
In this comparison, we explore the analyst ratings and average 1-year price targets of and National Beverage, three prominent industry players, offering insights into their relative performance expectations and market positioning.
<ul>
<li>As per analysts' assessments, National Beverage is favoring an Sell trajectory, with an average 1-year price target of $45.0, suggesting a potential 47.1% downside.</li>
</ul>
<h3>Key Findings: Peer Analysis Summary</h3>
The peer analysis summary outlines pivotal metrics for and National Beverage, demonstrating their respective standings within the industry and offering valuable insights into their market positions and comparative performance.

<table>
<thead>
<tr>
<th>Company</th>
<th>Consensus</th>
<th>Revenue Growth</th>
<th>Gross Profit</th>
<th>Return on Equity</th>
</tr>
</thead>
<tbody>
<tr>
<td>Celsius Holdings</td>
<td>Buy</td>
<td>23.35%</td>
<td>$209.10M</td>
<td>17.68%</td>
</tr>
<tr>
<td>National Beverage</td>
<td>Sell</td>
<td>1.61%</td>
<td>$122.43M</td>
<td>13.12%</td>
</tr>
</tbody>
</table>

Key Takeaway:
Coca-Cola Femsa ranks higher than its peers in terms of revenue growth and gross profit. However, it lags behind in terms of return on equity.
<h3>Delving into Coca-Cola Femsa's Background</h3>
Coca-Cola Femsa, a subsidiary of Femsa, is the largest franchise bottler of wide-moat Coca-Cola in volume terms. The company purchases beverage concentrates and syrup from Coca-Cola, which it then processes and packages for distribution through modern trade, traditional trade and the on-premises channel. Mexico and Brazil make up 80% of total sales, with the rest from other Central and South American countries, including Panama, Guatemala, Uruguay, and Argentina. Parent Femsa and Coca-Cola hold 47% and 28% of economic interests in Coca-Cola Femsa, through nonpublicly traded A and D shares, respectively, while controlling 56% and 33% of the respective voting power.
<h3>Coca-Cola Femsa's Economic Impact: An Analysis</h3>
Market Capitalization Analysis: The company's market capitalization is below the industry average, suggesting that it is relatively smaller compared to peers. This could be due to various factors, including perceived growth potential or operational scale.
Revenue Growth: Over the 3 months period, Coca-Cola Femsa showcased positive performance, achieving a revenue growth rate of 13.07% as of 30 June, 2024. This reflects a substantial increase in the company's top-line earnings. When compared to others in the Consumer Staples sector, the company excelled with a growth rate higher than the average among peers.
Net Margin: Coca-Cola Femsa's net margin is below industry averages, indicating potential challenges in maintaining strong profitability. With a net margin of 8.07%, the company may face hurdles in effective cost management.
Return on Equity (ROE): The company's ROE is below industry benchmarks, signaling potential difficulties in efficiently using equity capital. With an ROE of 4.53%, the company may need to address challenges in generating satisfactory returns for shareholders.
Return on Assets (ROA): Coca-Cola Femsa's ROA lags behind industry averages, suggesting challenges in maximizing returns from its assets. With an ROA of 1.98%, the company may face hurdles in achieving optimal financial performance.
Debt Management: Coca-Cola Femsa's debt-to-equity ratio is below the industry average at 0.56, reflecting a lower dependency on debt financing and a more conservative financial approach.
<a href="https://www.benzinga.com/quote/KOF/earnings">To track all earnings releases for Coca-Cola Femsa visit their earnings calendar on our site.</a>
This article was generated by Benzinga's automated content engine and reviewed by an editor.

Coca-Cola Femsa's Earnings Outlook

Barclays analyst Benjamin Theurer maintains Coca-Cola Femsa SAB de (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KOF#NYSE">KOF</a>) with a Overweight and raises the price target from $105 to $110.

Barclays Maintains Overweight on Coca-Cola Femsa SAB de, Raises Price Target to $110

Barclays analyst Benjamin Theurer maintains Coca-Cola Femsa SAB de (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KOF#NYSE">KOF</a>) with a Overweight and lowers the price target from $115 to $105.

Barclays Maintains Overweight on Coca-Cola Femsa SAB de, Lowers Price Target to $105

Anheuser-Busch InBev SA/NV (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/bud#NYSE">BUD</a>), alias AB InBev, has seen its shares rise in the past three months ahead of its industry peers and the broader sector. The momentum in the share price results from the company&#39;s undaunted focus on lifting its brands through continued efforts to offer beer variants, a strategy that is in sync with consumers&#39; premiumization trend in the alcohol industry.
Premiumization refers to the growing consumer demand for premium alcohol products. This led alcohol makers to adopt the premiumization strategy to bolster their premium portfolio. AB InBev is no exception to this trend. The premiumization of the beer industry has been a key growth opportunity for AB InBev.
BUD has been investing in developing a diverse portfolio of global, international crafts and specialty premium brands in its markets. Notably, the company&#39;s global brands lead the way in premiumization. 
BUD&#39;s above-core portfolio has been performing well for a while now.
Revenues for its above-core beer portfolio grew in the low-single digits in the first quarter of 2024, driven by strength in global brands and double-digit growth in other local megabrands like Leffe in Europe and Spaten in Brazil. The company&#39;s three global brands &mdash; Budweiser, Corona and Stella Artois &mdash; increased first-quarter revenues 5.2% year over year outside of their home markets, led by Corona, which improved 15.5%.
<h3>Share Performance</h3>
AB InBev&#39;s focus on premiumization has been well-reflected in its share price, with the stock outperforming the industry and the sector. Shares of this Zacks Rank #3 (Hold) company have gained 4.4% in the past three months against the industry&#39;s decline of 3.7%. The stock also fared better than the sector&#39;s rise of 3.5% in the same period.
<h3>Price Performance: BUD</h3>
<img alt="Zacks Investment Research" src="https://staticx-tuner.zacks.com/images/articles/charts/a9/71207.jpg?v=1644639857" />
Image Source: Zacks Investment Research
At the current price of $61.25, the stock trades at a 9.2% discount to its 52-week high of $67.49 reached on May 17, 2024. This indicates that the stock has further upside potential from here.
Additionally, AB InBev is trading above the 200-day moving average, indicating robust upward momentum and price stability. This technical strength reflects positive market perception and confidence in BUD&#39;s financial health and prospects.
<h3>Is AB InBev Well-Placed for the Long Term?</h3>
In addition to the premiumization efforts, AB InBev continues to witness positive business momentum on accelerated digital transformation, expansion of the Beyond Beer portfolio and other revenue-management initiatives. These efforts collectively position the company for growth in the long term.
AB InBev is committed to investments in new capabilities to better connect with customers and consumers. Its digital platform has been rapidly growing, leveraging technology, such as B2B sales and other e-commerce platforms, including BEES and Z&eacute; Delivery. The company is witnessing an acceleration in the B2B platforms, e-commerce and digital marketing trends, aiding top-line growth.
BUD&#39;s digital transformation initiatives have been on track, with B2B digital platforms contributing about 70% to its revenues in the first quarter. The company noted that the monthly active user base of BEES reached 3.6 million users as of the end of first-quarter 2024, reflecting year-over-year growth of 16%. It captured $11.3 billion in gross merchandise value (GMV), up 23% year over year. Its omni-channel, direct-to-consumer ecosystem of digital and physical products generated $350 million in revenues in the first quarter.
AB InBev is steadfastly growing its Beyond Beer portfolio, including products like ready-to-drink beverages like Canned Wine and Canned Cocktails, Hard Seltzers, Cider and Flavored Malt Beverages. The Beyond Beer trend is gaining popularity due to the rise in demand for low-alcoholic or non-alcoholic drinks.
The Beyond Beer portfolio contributed $320 million to the total revenues in first-quarter 2024, with low-single-digit year-over-year volume growth. The rise was primarily driven by its spirit-based ready-to-drink and flavored malt beverage portfolios in the United States, and the expansion of Brutal Fruit in Africa.
<h3>Headwinds</h3>
AB InBev continues to face elevated costs from commodity cost inflation, investments to support long-term growth and increased operating costs. SG&amp;A expenses rose 1.4% on an organic basis in the first quarter.
<h3>Conclusion</h3>
Despite the cost-related headwinds, AB InBev shows resilience and growth potential for the long term. Its unique commercial strategy, strong brand portfolio, premiumization efforts and investments in operational excellence bode well.
<h3>Stocks to Consider</h3>
We have highlighted three better-ranked stocks from the Consumer Staple sector, namely Vital Farms (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/vitl#NASDAQ">VITL</a>), Vita Coco Company and Coca-Cola FEMSA (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/kof#NYSE">KOF</a>).
Vital Farms currently flaunts a Zacks Rank #1 (Strong Buy). VITL shares have rallied 77.2% in the past three months.
The Zacks Consensus Estimate for Vital Farms&#39; current financial-year sales and earnings suggests growth of 22.6% and 62.7%, respectively, from the year-ago period&#39;s reported figures. VITL has a trailing four-quarter earnings surprise of 102.1%, on average.
Vita Coco presently carries a Zacks Rank #2 (Buy). COCO shares have rallied 26.7% in the past three months. The company has a trailing four-quarter earnings surprise of 25.3%, on average.
The Zacks Consensus Estimate for Vita Coco&#39;s current financial-year sales and earnings suggests growth of 3.5% and 40.5%, respectively, from the year-ago period&#39;s reported figures.
Coca-Cola FEMSA currently has a Zacks Rank #2. KOF shares have declined 9% in the past three months.
The Zacks Consensus Estimate for Coca-Cola FEMSA&#39;s current financial-year sales and EPS suggests growth of 11.9% and 26.7%, respectively, from the year-ago period&#39;s reported figures. KOF has a trailing four-quarter negative earnings surprise of 1.3%, on average.
<a href="https://www.zacks.com/stock/news/2300908/ab-inbev-s-bud-plans-on-track-can-it-retain-momentum?cid=CS-BENZ-FT-analyst_blog|rank_focused-2300908">To read this article on Zacks.com click here.</a>

Small Cap

VITL

AB InBev's Plans on Track: Can It Retain Momentum?

PepsiCo, Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/pep#NASDAQ">PEP</a>) has reported robust second-quarter 2024 results, wherein earnings surpassed the Zacks Consensus Estimate, while revenues lagged. However, the top and bottom lines improved year over year. The company&#39;s results have mainly been aided by improvements in its international business, which delivered significant volume growth and organic revenue growth of 5.5% year over year. The international business also reported 10% core operating profit growth and strong core operating margin expansion.
The results also reflect gains from strength and resilience in its categories, diversified portfolio, modernized supply chain, improved digital capabilities, flexible go-to-market distribution systems and robust consumer demand trends.
Shares of PepsiCo declined 1.9% in the pre-market session on Jul 11, as results have continued to be impacted by QFNA&#39;s recall-related headwinds and soft performance at the North America convenient foods businesses. Shares of the Zacks Rank #3 (Hold) company have declined 2.7% in the past three months against the industry&#39;s 2.6% growth.
<img alt="Zacks Investment Research" src="https://staticx-tuner.zacks.com/images/articles/charts/bd/71092.jpg?v=1128511273" />
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<h3>Quarter in Detail</h3>
PepsiCo&#39;s second-quarter core EPS of $2.28 beat the Zacks Consensus Estimate of $2.15 and increased 9% year over year. In constant currency, core earnings improved 10% from the year-ago period. The company&#39;s reported EPS of $2.23 rose 13% year over year in the quarter. Foreign currency impacted EPS by 1%.
Net revenues of $22.5 million rose 0.8% year over year but missed the Zacks Consensus Estimate of $22.6 billion. Revenues were negatively impacted by subdued category demand within its North America convenient foods businesses. Unit volume was down 2% for the convenient food business and was flat for the beverage business. Foreign currency impacted revenues by 1%.
On an organic basis, revenues grew 1.9% year over year, significantly below organic revenue growth of 13% in second-quarter 2023. The variance mainly resulted from a soft QFNA performance, which was impacted by certain product recalls. The QFNA segment revenues reduced organic revenue growth by 60 basis points (bps) in second-quarter 2024.
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<h3>PepsiCo, Inc. Price, Consensus and EPS Surprise</h3>
<img alt="PepsiCo, Inc. Price, Consensus and EPS Surprise" src="https://staticx-tuner.zacks.com/images/charts/a5/1720704535.png" style="height:282px; width:620px" title="" />
PepsiCo, Inc. price-consensus-eps-surprise-chart | PepsiCo, Inc. Quote
The company&#39;s consolidated organic volume was down 3%, while effective net pricing improved 5% in the second quarter. Pricing gains were driven by strong realized prices across all segments, except for QFNA.
Our model predicted year-over-year organic revenue growth of 2.8% for the second quarter, with a 4.5% gain from price/mix and a 1.7% decline in volume.
On a consolidated basis, the reported gross profit increased 3.1% year over year to $12.58 billion. The core gross profit rose 3% year over year to $12.57 million. The reported gross margin expanded 126 bps, whereas the core gross margin expanded by 120 bps.
We anticipated the core gross margin to expand 20 bps year over year to 54.9% in the second quarter. In dollar terms, core gross profit was expected to increase 2% year over year.
The company reported an operating income of $4.05 billion, which rose 10.6% year over year. The core operating income grew 6.8% year over year to $4.12 billion. The core constant-currency operating income also improved 7% year over year. The reported operating margin expanded 160 bps from the year-ago quarter. Meanwhile, the core operating margin expanded 103 bps, driven by holistic productivity initiatives, offset by planned business investments.
Our model predicted core SG&amp;A expenses of $8.6 billion, which indicated year-over-year growth of 2.8%. As a percentage of sales, core SG&amp;A expenses were anticipated to be 37.9%, suggesting a 50-bps rise from the prior-year quarter.
We expected a core operating margin of 17.1%, implying a 20-bps decline from the year-ago quarter&#39;s actual.
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<h3>Segmental Details</h3>
The company witnessed revenue growth on a reported basis across most of the operating segments, except for QFNA, FLNA and APAC. Revenues in the QFNA segment were impacted by certain product recalls and tough revenue growth comparisons with the prior year. FLNA revenues were partly marred by subdued category demand in the convenient foods business.
Revenues on a reported basis improved 1% year over year in PBNA, 7% in Latin America, 2.5% in Europe, and 2% in the AMESA segment. However, reported revenues declined 0.5% at FLNA, 18% at QFNA and 2% at the APAC segment.
PEP&#39;s organic revenues improved across all operating segments, except for QFNA. Organic revenues were flat for FLNA, and rose 1% for PBNA, 2% for Latin America, 7% for Europe, 12% for AMESA and 1% for the APAC segment. However, organic revenues declined 18% for the QFNA segment.
<h3>Financials</h3>
The company ended second-quarter 2024 with cash and cash equivalents of $6.4 billion, long-term debt of $36.6 billion, and shareholders&#39; equity (excluding non-controlling interest) of $19.4 billion.
Net cash used in operating activities was $1.3 billion as of Jun 15, 2024, compared with $2 billion as of Jun 17, 2023.
<h3>Outlook</h3>
PepsiCo has revised its view for 2024. The company expects year-over-year organic revenue growth of 4% for 2024, compared with the prior view of at least 4%. It anticipates core constant-currency EPS growth of at least 8% from the year-ago period&#39;s reported figure.
Based on the current rates, PEP expects currency headwinds to hurt revenues and the core EPS by 1 percentage point in 2024. The company expects a core effective tax rate of 20% for 2024.
Given the above assumption, PepsiCo expects a core EPS of at least $8.15 for 2024. This suggests a 7% increase from the core EPS of $7.62 reported in 2023.
PepsiCo has been committed to rewarding shareholders through dividends and share buybacks. It expects to return a value worth $8.2 billion in 2024, including $7.2 billion of dividends. Additionally, the company plans to repurchase shares worth $1 billion in 2024.
<h3>Don&#39;t Miss These Better-Ranked Stocks</h3>
We have highlighted three better-ranked stocks from the Consumer Staple sector, namely Vita Coco Company (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/coco#NASDAQ">COCO</a>), Coca-Cola FEMSA (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/kof#NYSE">KOF</a>) and J &amp; J Snack Foods (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/jjsf#NASDAQ">JJSF</a>).
Vita Coco currently flaunts a Zacks Rank #1 (Strong Buy). COCO shares have rallied 20.4% in the past three months. The company has a trailing four-quarter earnings surprise of 25.3%, on average.
The Zacks Consensus Estimate for Vita Coco&#39;s current financial-year sales and earnings suggests growth of 3.5% and 40.5%, respectively, from the year-ago period&#39;s reported figures.
Coca-Cola FEMSA currently has a Zacks Rank #2 (Buy). KOF shares have declined 12.3% in the past three months.
The Zacks Consensus Estimate for Coca-Cola FEMSA&#39;s current financial-year sales and EPS suggests growth of 11.9% and 26.7%, respectively, from the year-ago period&#39;s reported figures. KOF has a trailing four-quarter negative earnings surprise of 1.3%, on average.
J &amp; J Snack currently carries a Zacks Rank #2. JJSF shares have gained 24.2% in the past three months. JJSF has a trailing four-quarter earnings surprise of 5.7%, on average.
The Zacks Consensus Estimate for J &amp; J Snack&#39;s current financial-year sales and earnings suggests growth of 1.6% and 17.6%, respectively, from the year-ago period&#39;s reported figures.
<a href="https://www.zacks.com/stock/news/2300177/pepsico-pep-q2-earnings-beat-soft-qfna-results-hurt-stock?cid=CS-BENZ-FT-analyst_blog|earnings_article-2300177">To read this article on Zacks.com click here.</a>

COCO

JJSF

PepsiCo Q2 Earnings Beat, Soft QFNA Results Hurt Stock

UBS analyst Rodrigo Alcantara maintains Coca-Cola Femsa SAB de (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KOF#NYSE">KOF</a>) with a Buy and lowers the price target from $112 to $102.

UBS Maintains Buy on Coca-Cola Femsa SAB de, Lowers Price Target to $102

The Coca-Cola Company (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ko#NYSE">KO</a>) has reported first-quarter 2024 results, where in the top and bottom lines surpassed the Zacks Consensus Estimate and improved year over year. The company&#39;s results have benefited from its continued business momentum. Backed by the strong results, KO has raised its view for 2024. 
Comparable earnings of 72 cents per share rose 7% from the year-ago period and beat the Zacks Consensus Estimate of 69 cents. Unfavorable currency translations hurt comparable earnings by 9 percentage points. Comparable currency-neutral earnings per share rose 15% year over year. 
Revenues of $11,300 million surpassed the Zacks Consensus Estimate of $10,948 million and improved 3% year over year. Organic revenues rose 11% from the prior-year quarter. Coca-Cola&#39;s top line benefited from strong revenue growth across most of its operating segments, aided by an improved price/mix, offset by a decline in concentrate sales. In the reported quarter, Coca-Cola gained a global value share in the total non-alcoholic ready-to-drink beverages. 
The Zacks Rank #3 (Hold) stock has risen 5.2% in the year-to-date period compared with the industry&#39;s growth of 3.1%.
<img alt="Zacks Investment Research" src="https://staticx-tuner.zacks.com/images/articles/charts/f6/65906.jpg?v=408529735" /> 
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<h3>Volume &amp; Pricing</h3>
In the reported quarter, concentrate sales dipped 2% year over year, whereas the price/mix improved 13%. The price/mix benefited from pricing actions in the marketplace and a favorable mix. In the quarter, concentrate sales were 3 points lower than the unit case volume. The decline was driven by the timing of concentrate shipments and the impacts of one less day in the quarter. 
Coca-Cola&#39;s total unit case volume increased 1% year over year in the first quarter. The unit case volume for the developed markets was flat with the prior-year quarter. The volumes for the developing and emerging markets improved in the low-single digits on growth in Brazil, the Philippines and Nigeria. 
Our model had predicted year-over-year organic revenue growth of 6.4% for the first quarter, with a 6.8% gain from the price/mix and a 0.4% decline in the concentrate sales volume. 
Coming to the category cluster performance, the unit case volume increased 2% year over year for sparkling soft drinks. The sparkling soft drinks category benefited from growth in Latin America. The trademark Coca-Cola reported 2% growth in volumes, whereas Coca-Cola Zero Sugar witnessed a 6% rise. Meanwhile, the sparkling flavors category was flat year over year due to gains in EMEA and Latin America, offset by a decline in the Asia Pacific. 
Volumes for juice, value-added dairy and plant-based beverages were up 2% in the first quarter, aided by growth in North America. 
Unit volumes for the water, sports, coffee and tea category declined 2% year over year in the first quarter. Coca-Cola witnessed a 2% volume decline in the water category, driven by gains in the Asia Pacific and North America. Sports drinks fell 3% driven by decline in North America, which was partly offset by growth in Latin America and EMEA. The coffee business declined 3% due to a soft Costa coffee performance in the U.K. The tea volume improved 2% on growth in Latin America and EMEA.
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<h3>CocaCola Company (The) Price, Consensus and EPS Surprise</h3>
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<a href="https://www.zacks.com/stock/chart/KO/price-consensus-eps-surprise-chart?icid=chart-KO-price-consensus-eps-surprise-chart"><img alt="CocaCola Company (The) Price, Consensus and EPS Surprise" src="https://staticx-tuner.zacks.com/images/charts/43/1714486522.png" style="height:265px; width:574px" title="" /> </a>
CocaCola Company (The) price-consensus-eps-surprise-chart | CocaCola Company (The) Quote
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<h3>Segmental Details</h3>
Revenues rose 10% year over year for Latin America, 7% each for North America and the Asia Pacific, and 3% for Global Ventures. However, revenues declined 3% for EMEA and 7% for Bottling Investments.&nbsp; 
Organic revenues improved 15% year over year in EMEA, 22% in Latin America, 7% each in North America and the Asia Pacific, 1% in Global Ventures, and 13% in Bottling Investments.
<h3>Margins</h3>
In dollar terms, the operating income declined 36% year over year to $2,141 million, including an 8-point impact of currency headwinds. Comparable operating income rose 4.4% year over year. Comparable currency-neutral operating income advanced 13% on strong organic revenue growth across all segments, offset by higher marketing investments. 
The operating margin of 18.9% in the first quarter contracted significantly from 30.7% in the prior-year quarter. The comparable operating margin expanded 60 bps to 32.4%. 
Our model had predicted the first-quarter adjusted operating margin to expand 50 bps year over year to 32.3% on 50-bps growth in the gross margin.
<h3>Guidance</h3>
Management has raised its view for 2024. It anticipates organic revenue growth of 8-9% for 2024 compared with 6-7% growth mentioned earlier. Comparable net revenues are expected to include a 4-5% currency headwind based on current rates and hedge positions. The guidance includes a 4-5% negative impact of acquisitions, divestitures and structural changes. 
The company anticipates an underlying effective tax rate of 19% for 2024 versus 19.2% stated earlier. 
Comparable currency-neutral earnings per share are estimated to increase 11-13% year over year compared with the prior mentioned 8-10% growth. The company anticipates year-over-year comparable earnings per share growth of 4-5% for 2024. Comparable earnings per share growth is likely to include a headwind of 7-8% from currency and a 2% headwind from acquisitions, divestitures and structural changes. The company expects most of the currency headwinds to result from currency devaluation due to intense inflation. 
Management envisions an adjusted free cash flow of $9.2 billion for 2024, including $11.4 billion in cash flow from operations. Capital expenditure is likely to be $2.2 billion. 
For second-quarter 2024, comparable revenues are expected to include a 6% currency headwind, and a 5-6% negative impact of acquisitions, divestitures and structural changes. Comparable earnings per share are estimated to include a currency headwind of 8-9%, and a 2% negative impact of acquisitions, divestitures and structural changes.
<h3>Stocks to Consider</h3>
We have highlighted three better-ranked stocks from the Consumer Staple sector, namely PepsiCo Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/pep#NASDAQ">PEP</a>), Coca-Cola FEMSA (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/kof#NYSE">KOF</a>) and Vita Coco Company (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/coco#NASDAQ">COCO</a>). 
PepsiCo currently has a Zacks Rank #2 (Buy). PEP shares have risen 3.7% in the year-to-date period. The company has a trailing four-quarter earnings surprise of 5.1%, on average. 
The Zacks Consensus Estimate for PepsiCo&#39;s current financial-year sales and earnings suggests growth of 3.4% and 7.1%, respectively, from the year-ago period&#39;s reported figures. 
Coca-Cola FEMSA currently carries a Zacks Rank #2. KOF shares have gained 6.4% in the year-to-date period. 
The Zacks Consensus Estimate for Coca-Cola FEMSA&#39;s current financial-year sales and EPS suggests growth of 10.7% and 25.1%, respectively, from the year-ago period&#39;s reported figures. KOF has a trailing four-quarter negative earnings surprise of 1.3%, on average. 
Vita Coco has a trailing four-quarter earnings surprise of 31.3%, on average. It currently carries a Zacks Rank #2. COCO shares have declined 2.1% year to date. 
The Zacks Consensus Estimate for Vita Coco&#39;s current financial-year sales and earnings suggests growth of 1.8% and 24.3%, respectively, from the year-ago period&#39;s reported figures.
<a href="https://www.zacks.com/stock/news/2265373/coca-cola-ko-tops-on-q1-earnings-revenues-raises-view?cid=CS-BENZ-FT-analyst_blog|earnings_article-2265373">To read this article on Zacks.com click here.</a>

Coca-Cola Tops on Q1 Earnings & Revenues, Raises View

Coca-Cola Femsa (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KOF#NYSE">KOF</a>) reported quarterly earnings of $1.40 per share which beat the analyst consensus estimate of $1.23 by 13.82 percent. The company reported quarterly sales of $3.759 billion which beat the analyst consensus estimate of $3.597 billion by 4.50 percent. This is a 22.36 percent increase over sales of $3.072 billion the same period last year.

Coca-Cola Femsa Q1 2024 GAAP EPS $1.40 Beats $1.23 Estimate, Sales $3.759B Beat $3.597B Estimate

UBS analyst Rodrigo Alcantara maintains Coca-Cola Femsa SAB de (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KOF#NYSE">KOF</a>) with a Buy and raises the price target from $109 to $112.

UBS Maintains Buy on Coca-Cola Femsa SAB de, Raises Price Target to $112

JP Morgan analyst Lucas Ferreira maintains Coca-Cola Femsa SAB de (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KOF#NYSE">KOF</a>) with a Overweight and raises the price target from $102 to $107.

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