As the upcoming election season approaches, investors are looking for ways to protect their portfolios from potential volatility. One option that has caught the eye of Goldman Sachs is Coca-Cola FEMSA, a Mexico-based coke bottler. This defensive buy recommendation comes with a buy rating upgrade from neutral, along with a new 12-month target price of $113.70, representing a 35% increase from its current levels.
What makes Coke FEMSA an attractive investment amidst election uncertainty? According to analyst Thiago Bortoluci, the company’s solid industry fundamentals, inelastic demand for soft drinks in Mexico, and strong growth prospects in Central and South America make it a compelling choice. With a history of positive volume growth, pricing power, and cost moderation, Coke FEMSA is poised for potential margin expansion in the coming years.
In addition to its strategic investments in point-of-sale presence and expansion initiatives, Coke FEMSA is well-positioned to capitalize on opportunities in Brazil and Guatemala. These growth prospects, coupled with the company’s resilience against election-related volatility, make it a defensive stock worth considering in today’s market.
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