Coke Femsa Earnings: Strong Volume Driven by Favorable Macro Backdrop and In-Market Execution

Wide-moat bottler Coke Femsa reported strong first-quarter results, with sales up 11% (18% in constant currency) and net profits up 28%, thereby reaffirming our confidence in the strength of the Coke brands in Latin America and the bottler’s in-market execution expertise. Our 10-year projection for a 6% sales CAGR and a 14% average operating margin remains in place, and we plan to tick up our $94 fair value estimate by a low-single-digit percentage on time value. Shares look fairly valued.