Has Coca-Cola FEMSA’s Strong 2025 Share Price Run Already Reflected Its Fundamentals?

• If you are wondering whether Coca-Cola FEMSA. de is still good value after its strong run, or if most of the upside has already been priced in, you are not alone.
• The stock has climbed 3.1% over the last week, 4.1% over the last month, and is up 20.0% year to date. This builds on a 19.4% 1 year gain and gains of 55.0% and 146.8% over 3 and 5 years, respectively.
• Those gains have been supported by steady operational execution, continued strength in core Latin American beverage markets, and investor confidence in its ability to navigate input cost pressures. In addition, ongoing route to market investments and portfolio innovation have reinforced the narrative of a resilient, cash generative consumer staple.
• Even after that performance, Coca-Cola FEMSA. de scores a 5/6 on our valuation checks. This suggests the market may not be fully recognizing its fundamentals yet. Next, we will walk through different valuation approaches and, at the end, explore another way to think about what this stock may be worth.

Coca-Cola FEMSA. de delivered 19.4% returns over the last year. See how this stacks up to the rest of the Beverage industry.

Approach 1: Coca-Cola FEMSA. de Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a business is worth today by projecting the cash it can generate in the future and discounting those cash flows back to a present value.

For Coca-Cola FEMSA. de, the model uses a 2 Stage Free Cash Flow to Equity approach in MX$. The latest twelve month free cash flow is about MX$7.5 billion, and analysts expect this to rise steadily as the business scales. Simply Wall St combines analyst forecasts for the next few years with its own extrapolations, projecting free cash flow to reach roughly MX$49.8 billion by 2035.

When all projected cash flows are discounted back and summed, the model implies an intrinsic value of about $164.38 per share. Compared with the current market price, this suggests the shares trade at a 43.2% discount, indicating that investors are not fully pricing in Coca-Cola FEMSA. de future cash generation.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Coca-Cola FEMSA. de is undervalued by 43.2%. Track this in your watchlist or portfolio, or discover 903 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Coca-Cola FEMSA. de.

Approach 2: Coca-Cola FEMSA. de Price vs Earnings

For profitable, established businesses like Coca-Cola FEMSA. de, the price to earnings (PE) ratio is a practical way to gauge valuation because it directly links what investors pay today to the profits the company is generating. In general, companies with stronger, more predictable growth and lower perceived risk can justify higher PE ratios, while slower growing or riskier businesses usually trade on lower multiples.

Coca-Cola FEMSA. de currently trades on a PE of about 14.9x, which sits below both the Beverage industry average of roughly 17.6x and the broader peer group average of around 33.8x. Simply Wall St also calculates a proprietary Fair Ratio for the stock of 18.6x, which represents the PE that might be expected given its earnings growth profile, industry, profit margins, market cap and risk characteristics. This Fair Ratio offers a more tailored benchmark than a simple comparison with peers or sector averages, because it adjusts for company specific strengths and vulnerabilities rather than assuming all beverage stocks deserve the same multiple.

Comparing the current 14.9x PE with the 18.6x Fair Ratio suggests Coca-Cola FEMSA. de trades at a notable discount to what its fundamentals might justify.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1446 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Coca-Cola FEMSA. de Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way to connect your view of Coca-Cola FEMSA. de business with a set of forecasts and a Fair Value estimate on Simply Wall St's Community page.

A Narrative is the story behind your numbers. It captures how you think revenue, earnings and margins will evolve and then links that story to a financial model so you can see what the company might be worth today.

Because Narratives turn your assumptions into a Fair Value that can be compared directly with the current share price, they can help you decide whether Coca-Cola FEMSA. de looks like a buy, a hold, or a sell. They also automatically update as new earnings, news and price targets come in.

For example, one investor might build a bullish Narrative around strong digital platform expansion, margin gains and a Fair Value closer to the high analyst target of about $200. A more cautious investor might focus on tax and macro risks and land nearer the low target of about $93. Both can transparently track how new information shifts their Narrative and decision making over time.

Do you think there's more to the story for Coca-Cola FEMSA. de? Head over to our Community to see what others are saying!

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.

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