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Earnings Miss: Coca-Cola FEMSA, S.A.B. de C.V. Missed EPS By 12% And Analysts Are Revising Their Forecasts

Shareholders might have noticed that Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) filed its full-year result this time last week. The early response was not positive, with shares down 5.4% to US$38.82 in the past week. It was not a great result overall. While revenues of Mex$194b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 12% to hit Mex$56.95 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Coca-Cola FEMSA. de after the latest results.

See our latest analysis for Coca-Cola FEMSA. de

NYSE:KOF Past and Future Earnings March 27th 2020
NYSE:KOF Past and Future Earnings March 27th 2020

Taking into account the latest results, the current consensus from Coca-Cola FEMSA. de's 14 analysts is for revenues of Mex$222.5b in 2020, which would reflect a solid 14% increase on its sales over the past 12 months. Per-share earnings are expected to soar 37% to Mex$78.86. In the lead-up to this report, the analysts had been modelling revenues of Mex$236.0b and earnings per share (EPS) of Mex$88.20 in 2020. The analysts seem less optimistic after the recent results, reducing their sales forecasts and making a real cut to earnings per share numbers.

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The analysts made no major changes to their price target of US$70.37, suggesting the downgrades are not expected to have a long-term impact on Coca-Cola FEMSA. de's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Coca-Cola FEMSA. de at US$89.00 per share, while the most bearish prices it at US$53.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Coca-Cola FEMSA. de's growth to accelerate, with the forecast 14% growth ranking favourably alongside historical growth of 6.5% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 3.7% per year. 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. They also downgraded their revenue estimates, although industry data suggests that Coca-Cola FEMSA. de's revenues are expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Coca-Cola FEMSA. de analysts - going out to 2024, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Coca-Cola FEMSA. de you should know about.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.