Premium Spirits Demand And Digital Adoption Will Drive Global Expansion

Key Takeaways

• Premiumization strategy, global demand growth, and digital expansion drive sustained revenue and earnings improvement through higher margins and diversified consumer reach.
  
• Enhanced balance sheet and disciplined investment approach position the company for long-term growth through acquisitions and improved capital returns.
  
• Intense competitive pressures, shifting consumer trends, and reliance on currency tailwinds threaten revenue stability, margin expansion, and core growth drivers across key international markets.

Catalysts

Manufactures and distributes spirits and other distilled beverages in Mexico, the United States, Canada, and internationally.

• Resilient performance and market share gains in premium Tequila, coupled with strong volume growth in Mexico and improving trends in Latin America and Asia, position Becle to benefit from rising demand among the expanding global middle class and ongoing premiumization of spirits, supporting top-line revenue growth and future pricing power.
  
• The company's premiumization strategy is driving consistent gross and EBITDA margin expansion, enhanced by a shift in product mix toward higher-margin offerings and ongoing investment in cost efficiencies, which increases operating leverage and will likely continue supporting net margin and earnings growth.
  
• Evolving consumer preferences in emerging markets for authentic, heritage brands favors Becle's globally recognized labels, especially as premium spirits outperform broader categories; this should sustain export growth and broaden revenue streams.
  
• Continued adoption of digital and e-commerce distribution channels presents opportunities to reach consumers directly, reduce distribution costs, and build loyalty, thereby supporting faster revenue growth and potentially mitigating future margin pressure.
  
• Becle's balance sheet improvements, disciplined capital allocation, and readiness to seize inorganic growth opportunities (such as acquiring premium brands) enhance the potential for long-term earnings expansion and improved returns on invested capital.

Becle. de Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Becle. de's revenue will grow by 6.7% annually over the next 3 years.
• Analysts assume that profit margins will increase from 12.5% today to 13.4% in 3 years time.
• Analysts expect earnings to reach MX$7.3 billion (and earnings per share of MX$1.93) by about August 2028, up from MX$5.6 billion today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting MX$9.1 billion in earnings, and the most bearish expecting MX$5.8 billion.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 21.6x on those 2028 earnings, up from 15.0x today. This future PE is greater than the current PE for the MX Beverage industry at 15.7x.
• Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 14.12%, as per the Simply Wall St company report.

Becle. de Future Earnings Per Share Growth

Risks

• The company is experiencing persistent competitive pricing pressure in the U.S.-its largest international market-with Tequila category prices down nearly 9% on average; aggressive promotions are needed to defend volume, risking long-term brand equity and triggering price wars, which can compress both revenue growth and gross/net margins.
  
• Consolidated revenue growth is currently heavily dependent on favorable foreign exchange tailwinds and strong performance in the Mexican market; a reversal of peso appreciation, normalization of FX rates, or weakened Mexican consumer demand could reduce earnings predictability and overall net income stability.
  
• Ongoing declines in the Ready-to-Drink (RTD) segment and fragmentation in this competitive non-beer alcoholic category indicate consumer preferences are shifting, which could structurally weaken a key growth engine and erode total volume/revenue if innovations do not gain traction.
  
• Elevated reliance on premiumization may not fully offset macroeconomic pressures and softer consumer demand, especially in developed markets like the U.S. and Europe, where consumers remain cautious, potentially limiting Becle's ability to sustain volume and price-led revenue expansion.
  
• Exposure to market volatility-including regulatory shifts (such as Canadian liquor board actions against U.S. products), inventory destocking trends, and ongoing macro/political instability in Latin America and EMEA-can result in shipment disruptions, uneven regional contribution, and short-term profitability risks, impacting both revenue consistency and margin outlook.

Valuation

• The analysts have a consensus price target of MX$29.626 for Becle. de based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of MX$40.71, and the most bearish reporting a price target of just MX$23.0.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be MX$54.6 billion, earnings will come to MX$7.3 billion, and it would be trading on a PE ratio of 21.6x, assuming you use a discount rate of 14.1%.
• Given the current share price of MX$23.47, the analyst price target of MX$29.63 is 20.8% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.