Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) Just Recorded An Earnings Miss And Analysts Are Updating Their Numbers
The analysts might have been a bit too bullish on Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF), given that the company fell short of expectations when it released its first-quarter results last week. Results look to have been somewhat negative - revenue fell 6.4% short of analyst estimates at Mex$43b, and statutory earnings of Mex$11.64 per share missed forecasts by 7.0%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Check out our latest analysis for Coca-Cola FEMSA. de
Taking into account the latest results, the consensus forecast from Coca-Cola FEMSA. de's 15 analysts is for revenues of Mex$200.4b in 2020, which would reflect a satisfactory 3.5% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to descend 12% to Mex$50.33 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of Mex$211.1b and earnings per share (EPS) of Mex$60.26 in 2020. The analysts seem less optimistic after the recent results, reducing their sales forecasts and making a substantial drop in earnings per share numbers.
The analysts made no major changes to their price target of US$58.27, suggesting the downgrades are not expected to have a long-term impact on Coca-Cola FEMSA. de'svaluation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Coca-Cola FEMSA. de at US$89.00 per share, while the most bearish prices it at US$45.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Coca-Cola FEMSA. de's revenue growth is expected to slow, with forecast 3.5% increase next year well below the historical 6.2%p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.5% per year. Factoring in the forecast slowdown in growth, it seems obvious that Coca-Cola FEMSA. de is also expected to grow slower than other industry participants.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Coca-Cola FEMSA. de. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at Mex$58.27, 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. We have estimates - from multiple Coca-Cola FEMSA. de analysts - going out to 2024, and you can see them free on our platform here.
It is also worth noting that we have found 2 warning signs for Coca-Cola FEMSA. de that you need to take into consideration.
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