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Morgan Stanley sorts out Latin America food stocks

Published 09/14/2017, 10:31 AM
© Reuters.  Morgan Stanley sorts out Latin America food stocks
MS
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KOF
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GPAGF
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BIMBOA
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FMX
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ABEV
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  • Morgan Stanley (NYSE:MS) dives into the Latin America food and beverage sector. In general, the firm expects improved pricing power to lift margins, although market expectations are seen as too high in Brazil.
  • The MS team says it prefers food names exposed to Mexico or the U.S. "We also tend to favor names that are less exposed to big changes in commodities/FX," reads the analyst note. "On the other hand, we would avoid names that are trading well above historical multiples that have a strong recovery of Brazil baked into current estimates," warns the firm.
  • Morgan Stanley's individual picks are listed below.
  • Fomento Economico Mexicano (FMX, OTCPK:FMXUF) is rated at Overweight. Price target potential +21%.
  • Gruma (OTC:GMKYY, OTC:GPAGF, OTC:GMKKY) is rated at Overweight. Price target potential +12%.
  • Bimbo (OTCPK:GRBMF, OTCPK:BMBOY) is rated at Equalweight. Price target potential -1%.
  • Arca Continental (OTCPK:EMBVF, OTCPK:EMBVY) is rated at Equalweight. Price target potential +3%.
  • Ambev (NYSE:ABEV) is rated at Equalweight. Price target potential -5%.
  • Coca-Cola FEMSA (NYSE:KOF) is rated at Underweight. Price target potential -4%.
  • Embotelladora Andina (AKO.A, AKO.B) is rated at Undeweight. Price target potential -12%.
  • Grupo Lala (OTCPK:GRPBF, OTC:GLSDF) is rated at Underweight. Price target potential -1%.
  • Now read: United States Lime & Minerals: After The Rally, Further Upside Ahead


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