Mexico’s Cuervo, Femsa among companies well-positioned for ’22 -Barclays

The logo of Mexico’s Coca-Cola FEMSA, the world’s biggest Coke bottler, is pictured at its headquarters in Monterrey, Mexico, August 19, 2018. REUTERS/Daniel Becerril/File Photo

MEXICO CITY, Jan 19 (Reuters) – Tequila maker Cuervo, restaurant operator Alsea, bottler and retailer Femsa and supermarket retailer La Comer are among the listed Mexican companies positioned well in 2022, Barclays analysts said in a report, adding consumer companies in general will surpass pre-pandemic sales levels.

Analysts Benjamin Theurer and Antonio Hernandez raised their target price on Cuervo’s (CUERVO.MX) to 58 pesos from 55 and forecasted strong sales due to tequila “further gaining importance in the U.S.” and the easing of supply chain constraints.

La Comer’s target price was maintained at 41 pesos, but the analysts pointed to the company as a market leader in sales as it keeps gaining scale. They forecast that La Comer, bread maker Bimbo and bottler Arca Continental (AC.MX) would finish 2022 with the consumer segment’s highest margin expansions.

The analysts kept their target price for Alsea (ALSEA.MX) at 50 pesos and highlighted that the Mexican restaurant operator could gain market share due to the struggles its smaller competitors face after two years of the pandemic.

They maintained their target price for Femsa at 90 pesos, expressing caution about openings in its OXXO convenience store chain given the recent uptick in COVID-19 cases. Nonetheless, the analysts expect most of its business segment’s revenues to reach pre-pandemic levels in 2022.

Mexico started the year as the only major economy in Latin America still lagging pre-pandemic GDP levels, but the Barclays analysts estimated its year-on-year growth at 3.6%, above the market consensus of 2.8% due to a gradual economic normalization and a boost from U.S. fiscal stimulus programs.

Reporting by Valentine Hilaire; Editing by David Gregorio

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