Consumer Sector Ideas

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Latin American Beverage Stocks



>>> JPMorgan Likes Latin American Beverage Stocks


By Ben Levisohn

Jan 11, 2013


http://blogs.barrons.com/emergingmarketsdaily/2013/01/11/jpmorgan-likes-latin-american-beverage-stocks/?mod=yahoobarrons




JPMorgan released a note on Latin American staples on Dec. 10– and the company is particularly bullish on beverage stocks.


Lynn Bo Bo/European Pressphoto AgencyBeverage stocks should continue growing earnings at a double-digit clip, analysts Alan Alanis and Sambuddha Ray say, and their high valuations can be sustained if the good news continues.

They’re particularly bullish on Companhia de Bebidas Das Americas (ABV) , known as AMBEV. Not only do they see earnings growing, they also believe there’s a good chance the company will raise its dividend. The analysts set a 2013 price target of 97 reais on the stock, up 11% from today’s 87.28, and rate the stock and overweight.

Compania Cervecerias Unidas S.A. (CCU), meanwhile, should benefit from easy comparisons–so operating performance should “improve significantly in 2013.” JPMorgan set a 2013 price target of $36 on the stock, up 14K% from today’s $31.58.

Fomento Económico Mexican (FMX), or FEMSA, will benefit from its exposure to Mexican retailer Oxx0, which is trading at a discount to other Mexican–despite having stronger growth and better margins. JPMorgan set a 2013 price target of $110 on the stock, up 3.9% from today’s $105.86.

Coca-Cola Femsa (KOF), a Coca-Cola Co. (KO) bottler, concerns JPMorgan because of its extreme valuation–it currently trades at a PE multiple of 24.6, according to Morningtsar. The analysts set a 2013 price target of $158 on the stock, up 1.4% from today’s $155.83.

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