Coca-Cola FEMSA, S.A.B. de C.V. (KOF): A Bull Case Theory

We came across a bullish thesis on Coca-Cola FEMSA, S.A.B. de C.V. on Value Investor Hub’s Substack. In this article, we will summarize the bulls’ thesis on KOF. Coca-Cola FEMSA, S.A.B. de C.V.'s share was trading at $104.29 as of January 30th. KOF’s trailing and forward P/E were 39.79 and 116.28, respectively according to Yahoo Finance.

Coca-Cola FEMSA (KOF) is the world’s largest Coca-Cola bottler by volume, operating across Latin America, a region with younger demographics, faster consumption growth, and meaningful margin expansion potential. The company is far more than a bottler: it manages over 2 million points of sale, 250+ distribution centers, and 50 manufacturing plants, reaching nearly 275 million consumers.

KOF has quietly transformed itself over the years by investing in digital infrastructure, expanding capacity through record capital expenditures, and maintaining one of the cleanest balance sheets in emerging markets, with net debt under 0.8× EBITDA. This operational scale and financial discipline create a resilient, cash-generating business trading at one of the lowest EV/EBITDA multiples among global Coca-Cola bottlers.

KOF’s moat is reinforced by exclusive franchise rights across massive territories, deep local market knowledge, and a strong partnership with Coca-Cola, which ensures global brand power and pricing leverage. Despite cost inflation and currency volatility, the company consistently expands gross margins, demonstrating strong brand trust and pricing power. Management maintains low leverage, steadily returns cash to shareholders through dividends, and reinvests in logistics, production capacity, and data systems, ensuring long-term compounding of value.

Trading at roughly 14× forward earnings and 8× EV/EBITDA, the market appears to discount temporary FX pressures and heavy CapEx, both of which are manageable. Conservative valuation models suggest significant upside, with fair value estimates ranging from $69 to $160 depending on growth and free cash flow assumptions.

While currency fluctuations, tax changes, and macroeconomic cycles pose risks, KOF’s low leverage, rising ROIC, expanding digital infrastructure, and enduring Coca-Cola partnership position it as a disciplined, resilient compounder. At the current price of $86 (as of Nov 02, 2025), KOF offers a compelling risk/reward profile, making it an attractive way to access the Coca-Cola ecosystem in emerging markets.

Previously, we covered a bullish thesis on The Coca-Cola Company (KO) by Rijnberk InvestInsights in February 2025, which highlighted KO’s strong organic growth, margin expansion, and resilient EPS, supported by a well-covered dividend. KO’s stock price has appreciated by approximately 8.62% since our coverage as the thesis played out. Rijnberk InvestInsights shares an identical perspective but emphasizes updated 2025 guidance.

Coca-Cola FEMSA, S.A.B. de C.V. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 10 hedge fund portfolios held KOF at the end of the third quarter which was 10 in the previous quarter. While we acknowledge the potential of KOF as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.