US: Grupo Modelo rating raised
By just-drinks.com editorial team | 8 April 2005
Grupo Modelo has had its rating upgraded. UBS yesterday (7 April) upped the Mexican brewing company to 'buy 2' from 'neutral,' citing unexpectedly strong operating results in the past two quarters.
The company also raised its price target to MXN41 per share from MXN36.50.
In a note, UBS analysts said: "Modelo has posted better-than-expected operating results despite price discounting from September to early December 2004." UBS cited cost savings from the restructuring of distribution units.
While Modelo is expected to continue to lose market share, second-half 2004 results "represented a vindication of its present strategy," and the company may be able to postpone additional investments in its systems for a few more years, UBS added.
Sectors: Beer & cider