Zacks Investment Research upgraded shares of Fomento Economico Mexicano S.A.-ADR (FMX) from UNDERPERFORM to NEUTRAL on December 20, 2013, with a target price of $100.00.
We have upgraded our long-term recommendation on FEMSA to Neutral based on better-than-expected third-quarter fiscal 2013 results. We believe that FEMSA's robust quarterly performance and initiatives to diversify its portfolio constitute its strengths. Going forward, we consider that the company's divestment of Quimiproductos has provided it greater financial and strategic flexibility to pursue opportunities in its core businesses. Further, the company's efforts to diversify the product portfolio while expanding its convenience store chain augur well for future operating performance. However, imposition of tax on sugary beverages by the Mexican government, stiff competition from private players and rising commodity costs compel us to be on the sidelines. Therefore, we are maintaining our long-term Neutral recommendation on the stock.
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