Coca-Cola FEMSA, S.A.B. de C.V. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) just released its latest quarterly results and things are looking bullish. It was overall a positive result, with revenues beating expectations by 4.2% to hit Mex$62b. Coca-Cola FEMSA. de reported statutory earnings per share (EPS) Mex$23.10, which was a notable 17% above what the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Coca-Cola FEMSA. de

Following the latest results, Coca-Cola FEMSA. de's 16 analysts are now forecasting revenues of Mex$267.0b in 2024. This would be a credible 6.1% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 6.8% to Mex$105. Before this earnings report, the analysts had been forecasting revenues of Mex$269.8b and earnings per share (EPS) of Mex$107 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$108, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Coca-Cola FEMSA. de analyst has a price target of US$195 per share, while the most pessimistic values it at US$70.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Coca-Cola FEMSA. de's growth to accelerate, with the forecast 8.3% annualised growth to the end of 2024 ranking favourably alongside historical growth of 6.3% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.9% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Coca-Cola FEMSA. de is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$108, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Coca-Cola FEMSA. de going out to 2026, and you can see them free on our platform here..

It might also be worth considering whether Coca-Cola FEMSA. de's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.