HALISTER1: Alsea Raised at Barclays on Cheaper Cheese, Resilient Consumers

Alsea Raised at Barclays on Cheaper Cheese, Resilient Consumers

(Bloomberg) -- Alsea’s gross margins will probably expand by 0.8% this year while Ebitda margins could increase by 0.2% as the company benefits from a more stable consumer environment in Latin America, cheaper raw materials and a stronger Mexican peso, Barclays analysts led by Benjamin Theurer write in note. 
  • Cost of raw materials that are most important to Alsea (cheese, coffee and meat) expected to stay "fairly stable" as they’re priced in USD-terms and the peso has strengthened
    • NOTE: Alsea operates Starbucks, Burger King and Domino’s Pizza franchises in Mexico
  • Stronger peso has removed FX pressure for Alsea and will probably help Ebitda grow faster than sales in 2017
  • Not expecting M&A in next year as company has the option to spend ~3.6b pesos (~$202m) acquiring a remaining 28% stake in Grupo Zena before a put/call option expires next year
  • Earlier, Alsea Upgraded to Overweight at Barclays; Price Target MXN72
To contact the reporter on this story: Michelle F. Davis in Mexico City at mdavis194@bloomberg.net To contact the editors responsible for this story: Arie Shapira at ashapira3@bloomberg.net Scott Schnipper

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
ALSEA* MM (Alsea SAB de CV)

People
Benjamin M Theurer (Barclays PLC)

To de-activate this alert, click here
To modify this alert, click here

UUID: 7947283