What Coca-Cola FEMSA (KOF)’s Rising Capital Efficiency Means for Shareholders

• Recently, Coca-Cola FEMSA reported an upward trend in return on capital employed (ROCE), driven by improved operational efficiencies and steady capital use over the past five years.
• This improvement suggests that the company is achieving higher returns from its existing resources, which may indicate stronger long-term growth potential.
• We’ll now explore how Coca-Cola FEMSA’s enhanced capital efficiency could impact its investment narrative and future growth prospects.

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Coca-Cola FEMSA. de Investment Narrative Recap

To feel confident as a Coca-Cola FEMSA shareholder, you need to believe in the company’s ability to steadily create value, particularly by increasing returns on its existing capital despite economic challenges in key markets. While the recent uptick in return on capital employed (ROCE) aligns with this big-picture thesis, its immediate impact is limited by continued pressure on profit margins and the risk of macroeconomic headwinds in Mexico and Brazil.

Of the company’s recent announcements, the second quarter 2025 earnings report is especially relevant: it featured strong year-on-year sales growth but a slight decline in net income. This suggests that operational efficiency improvements are helping offset certain pressures, yet margin compression remains an ongoing short-term concern for investors watching for clear signs of turnaround.

However, underlying these efficiency gains, margin squeezes in Mexico could still present a material risk investors should be aware of if…

Read the full narrative on Coca-Cola FEMSA. de (it's free!)

Coca-Cola FEMSA. de's outlook projects MX$351.3 billion in revenue and MX$30.6 billion in earnings by 2028. This is based on a 6.7% annual revenue growth rate and a MX$7.0 billion increase in earnings from the current level of MX$23.6 billion.

Uncover how Coca-Cola FEMSA. de's forecasts yield a $117.70 fair value, a 40% upside to its current price.

Exploring Other Perspectives

Fair value estimates from 9 Simply Wall St Community members span a wide range, from US$77.49 to US$181.15 per share. With margin pressure ongoing in key markets, it’s clear that market participants assess Coca-Cola FEMSA through many different lenses, explore several viewpoints to inform your own outlook.

Explore 9 other fair value estimates on Coca-Cola FEMSA. de - why the stock might be worth 8% less than the current price!

Build Your Own Coca-Cola FEMSA. de Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Coca-Cola FEMSA. de research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Coca-Cola FEMSA. de research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Coca-Cola FEMSA. de's overall financial health at a glance.

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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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