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Coca Cola Femsa S.A.B. de C.V. (KOF) Hits Fresh High: Is There Still Room to Run?
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Have you been paying attention to shares of Coca-Cola FEMSA (KOF - Free Report) ? Shares have been on the move with the stock up 8.3% over the past month. The stock hit a new 52-week high of $84.68 in the previous session. Coca-Cola FEMSA has gained 23.3% since the start of the year compared to the 2.5% move for the Zacks Consumer Staples sector and the 6.1% return for the Zacks Beverages - Soft drinks industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 23, 2023, Coca-Cola FEMSA reported EPS of $1.73 versus consensus estimate of $1.1 while it beat the consensus revenue estimate by 1.21%.
For the current fiscal year, Coca-Cola FEMSA is expected to post earnings of $4.86 per share on $12.8 billion in revenues. This represents a 7.76% change in EPS on a 13.35% change in revenues. For the next fiscal year, the company is expected to earn $5.55 per share on $13.03 billion in revenues. This represents a year-over-year change of 14.3% and 1.85%, respectively.
Valuation Metrics
Coca-Cola FEMSA may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Coca-Cola FEMSA has a Value Score of C. The stock's Growth and Momentum Scores are B and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 17.2X current fiscal year EPS estimates, which is not in-line with the peer industry average of 24.5X. On a trailing cash flow basis, the stock currently trades at 95X versus its peer group's average of 20X. Additionally, the stock has a PEG ratio of 1.44. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Coca-Cola FEMSA currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Coca-Cola FEMSA passes the test. Thus, it seems as though Coca-Cola FEMSA shares could have potential in the weeks and months to come.
How Does KOF Stack Up to the Competition?
Shares of KOF have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is PepsiCo, Inc. (PEP - Free Report) . PEP has a Zacks Rank of # 2 (Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of D.
Earnings were strong last quarter. PepsiCo, Inc. beat our consensus estimate by 1.83%, and for the current fiscal year, PEP is expected to post earnings of $7.23 per share on revenue of $89.51 billion.
Shares of PepsiCo, Inc. have gained 4.7% over the past month, and currently trade at a forward P/E of 25.56X and a P/CF of 20.04X.
The Beverages - Soft drinks industry is in the top 20% of all the industries we have in our universe, so it looks like there are some nice tailwinds for KOF and PEP, even beyond their own solid fundamental situation.
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Coca Cola Femsa S.A.B. de C.V. (KOF) Hits Fresh High: Is There Still Room to Run?
Have you been paying attention to shares of Coca-Cola FEMSA (KOF - Free Report) ? Shares have been on the move with the stock up 8.3% over the past month. The stock hit a new 52-week high of $84.68 in the previous session. Coca-Cola FEMSA has gained 23.3% since the start of the year compared to the 2.5% move for the Zacks Consumer Staples sector and the 6.1% return for the Zacks Beverages - Soft drinks industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 23, 2023, Coca-Cola FEMSA reported EPS of $1.73 versus consensus estimate of $1.1 while it beat the consensus revenue estimate by 1.21%.
For the current fiscal year, Coca-Cola FEMSA is expected to post earnings of $4.86 per share on $12.8 billion in revenues. This represents a 7.76% change in EPS on a 13.35% change in revenues. For the next fiscal year, the company is expected to earn $5.55 per share on $13.03 billion in revenues. This represents a year-over-year change of 14.3% and 1.85%, respectively.
Valuation Metrics
Coca-Cola FEMSA may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Coca-Cola FEMSA has a Value Score of C. The stock's Growth and Momentum Scores are B and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 17.2X current fiscal year EPS estimates, which is not in-line with the peer industry average of 24.5X. On a trailing cash flow basis, the stock currently trades at 95X versus its peer group's average of 20X. Additionally, the stock has a PEG ratio of 1.44. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Coca-Cola FEMSA currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Coca-Cola FEMSA passes the test. Thus, it seems as though Coca-Cola FEMSA shares could have potential in the weeks and months to come.
How Does KOF Stack Up to the Competition?
Shares of KOF have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is PepsiCo, Inc. (PEP - Free Report) . PEP has a Zacks Rank of # 2 (Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of D.
Earnings were strong last quarter. PepsiCo, Inc. beat our consensus estimate by 1.83%, and for the current fiscal year, PEP is expected to post earnings of $7.23 per share on revenue of $89.51 billion.
Shares of PepsiCo, Inc. have gained 4.7% over the past month, and currently trade at a forward P/E of 25.56X and a P/CF of 20.04X.
The Beverages - Soft drinks industry is in the top 20% of all the industries we have in our universe, so it looks like there are some nice tailwinds for KOF and PEP, even beyond their own solid fundamental situation.