Last Update 29 Oct 25

Fair value Decreased 94%

Analysts have reduced their price target for FIBRA Macquarie México from MXN 36.42 to MXN 34.00. They cite updated valuation models and recent sector performance as key factors in the downward revision.

Analyst Commentary

Bullish Takeaways

Bullish analysts note that Fibra Macquarie Mexico’s portfolio remains diversified, supporting income stability across economic cycles.
They highlight disciplined capital management and steady operational execution as positive factors for long-term growth prospects.
Resilient demand in key property segments continues to underpin manageable vacancy rates. This could buffer valuation despite sector headwinds.

Bearish Takeaways

Bearish analysts caution that the revised price target reflects tempered expectations for sector-wide recovery and rental growth.
They point to the downgrade in rating due to modest projected returns compared to prior outlooks, which aligns with more neutral sector performance.
Concerns also remain around macroeconomic uncertainties that could limit expansion plans or impact tenant activity in the near term.

What's in the News

FIBRA Macquarie México has completed the acquisition of a prime industrial logistics facility in Vallejo, a key logistics hub within Mexico City. (Key Developments)
The transaction was structured as a sale and leaseback with a leading global consumer company in the retail sector. (Key Developments)
The property is leased under a three-year, triple-net U.S. dollar-denominated agreement, which features a 6.9% compound annual rent escalation. (Key Developments)
The property is expected to generate Year 1 net operating income of approximately USD 2.8 million, with potential for a 20% rental rate uplift upon lease expiry. (Key Developments)

Valuation Changes

Fair Value Estimate: Decreased from MX$36.42 to MX$34.00, reflecting a 6.7% reduction in the updated assessment.
Discount Rate: Increased slightly from 18.07% to 18.39%, indicating a marginally higher return requirement by analysts.
Revenue Growth: Declined significantly, changing from a positive 6.9% to a negative 59.4%, which suggests a more cautious outlook on income expansion.
Net Profit Margin: Improved notably, rising from 81.1% to 122.9%, highlighting updated projections for stronger profitability.
Future P/E Ratio: Decreased from 9.90x to 7.21x, suggesting the stock could be valued at a lower earnings multiple in the future.

Strong leasing performance and low lease expiration schedule ensure stable revenue and upward pressure on rents, enhancing net operating income.
Strategic land acquisitions and favorable macroeconomic factors position the company for long-term growth in industrial space development and revenue potential.
Geopolitical uncertainties and financing challenges may negatively impact FIBRA Macquarie's industrial portfolio and revenue growth, despite a strong liquidity position.

Catalysts

About FIBRA Macquarie México

FIBRA Macquarie México (FIBRA Macquarie) (BMV:FIBRAMQ) is a real estate investment trust (fideicomiso de inversión en bienes raíces), or FIBRA, listed on the Mexican Stock Exchange (Bolsa Mexicana de Valores) targeting industrial, retail and office real estate opportunities in Mexico, with a primary focus on stabilized income-producing properties.What are the underlying business or industry changes driving this perspective?

FIBRA Macquarie's successful industrial development program, including secured tenants for new properties and additional buildings nearing completion, suggests potential future revenue growth from expanded Gross Leasable Area (GLA).
Strong leasing performance in 2023 and sustained double-digit re-leasing spreads into 2024 and expectations into 2025 indicate upward pressure on average rents, contributing to increased revenue and net operating income (NOI).
The company's low lease expiration schedule for 2025 reduces income volatility, providing stable revenue and earnings even in a cautious market environment.
Strategic land acquisitions in key markets such as Guadalajara and Monterrey enhance long-term revenue potential by positioning the company for additional industrial space development.
Favorable macroeconomic factors such as Mexico’s nearshoring incentives and infrastructure investments could bolster demand for industrial space, contributing to revenue growth and potentially favorable financing conditions impacting net margins.

FIBRA Macquarie México Earnings and Revenue Growth

FIBRA Macquarie México Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming FIBRA Macquarie México's revenue will grow by 6.9% annually over the next 3 years.
Analysts assume that profit margins will shrink from 226.3% today to 81.1% in 3 years time.
Analysts expect earnings to reach MX$4.8 billion (and earnings per share of MX$4.03) by about July 2028, down from MX$11.0 billion today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 9.9x on those 2028 earnings, up from 2.2x today. This future PE is greater than the current PE for the MX Industrial REITs industry at 4.8x.
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 18.07%, as per the Simply Wall St company report.

FIBRA Macquarie México Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The threat of tariffs and broader geopolitical uncertainties could negatively impact Mexico's export economy, which would potentially affect FIBRA Macquarie's industrial portfolio performance, leading to decreased revenue and NOI.
Higher interest expenses could offset some of the growth in AFFO and NOI, especially considering the ongoing investments in FIBRA Macquarie's industrial growth program, impacting net margins and earnings.
The industrial market in Monterrey and other border markets could face potential weakening due to deceleration related to nearshoring and USMCA uncertainties, which may slow revenue growth and increase vacancy rates.
Financing costs associated with new developments could strain the company’s balance sheet, particularly if revenue from these investments does not materialize as quickly as expected, which may lead to lower net margins.
Although FIBRA Macquarie has a healthy liquidity position, any deterioration in macro conditions could pressure its leverage metrics, possibly affecting earning stability and future investment capabilities.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of MX$36.423 for FIBRA Macquarie México 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$43.11, and the most bearish reporting a price target of just MX$29.14.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be MX$6.0 billion, earnings will come to MX$4.8 billion, and it would be trading on a PE ratio of 9.9x, assuming you use a discount rate of 18.1%.
Given the current share price of MX$30.26, the analyst price target of MX$36.42 is 16.9% higher. Despite analysts expecting the underlying buisness to decline, they seem to believe it's more valuable than what the market thinks.
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.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Downgrade and Cautious Outlook Will Limit Market Upside Despite New Acquisitions