馃惁‍⬛ CUERVO: FINANCIAL ANALYSIS 馃惁‍⬛

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馃惁‍⬛ CUERVO: FINANCIAL ANALYSIS 馃惁‍⬛


Becle, S.A.B. de C.V. manufactures and distributes spirits and other distilled beverages in Mexico, the United States, Canada, and internationally. The company offers tequila under the 1800, Jose Cuervo Especial, Jose Cuervo Tradicional, Reserva de la Familia, Gran Centenario, and Maestro Dobel brand names; whiskey, including North American whiskey under the Stranahan's, Tincup, and Pendleton brands, as well as Irish whiskey under the Bushmills, Proper No. Twelve, and The Sexton brands; rum under the Kraken and MATUSALEM brand; and vodka under the Three Olives and Hangar 1 brand names, as well as tequila liquor under the Agavero brand. It also provides ready-to-drink cocktails under the Jose Cuervo Paloma, Kraken Rum and Cola, Margarita, and 1800 Margarita brands; non-alcoholic beverages under the B:oost, Margarita Mix, and SANGRITA VIUDA DE SANCHEZ brand names; Mezcal under the Creyente and 400 Conejos brand names; and gin under the Boodles brand names.


Based on a sample of the last year [3Q/25 TTM], its average margins have been:
- Gross margin: ≈ 55.8%
- Operating margin: ≈ 21.7%
- EBITDA margin: ≈ 24.6%
- Net margin: ≈ 19.8%
- Debt Net / EBITDA: ≈ 7.79x

Pros:
- Reduction in CAPEX and OPEX in a company with no added value
- Relevant position with a Revenue Groth of 2% average YoY
- Increasing of EPS with a low valuations

Cons:
- Typical legal problems of populist regimes in Mexico
- High ratio in Net Debt
- Risk of deteriorating margins and delisted due to legal problems

Based on the last report, their normalized annual EPS was ≈ $2.4627 MXN and its last average ROIC [TTM] was ≈ 9.92%. If an average Forward PER 12 is set up as a benchmark with an EPS intensity of ± 0.424x, the potential forward spread target for the next ≈ 12 months could be:
- Optimistic: ≈ $42.03 MXN
- Neutral: ≈ $29.55 MXN
- Negative: ≈ $17.06 MXN
At least, an EPS of $0.4320 MXN is required for the next quarter, to keep the metrics.

In other hand, if an average Forward EV/EBITDA 12 is set, an EBITDA increases of ± 25%, a Net Debt increases of ± 14.2%, a Dividends increase of 0.0% and Shares Outstanding increases of ± -1.40%, the potencial spread price target for the next 12 months could be:
- Optimistic: ≈ $37.76 MXN
- Neutral: ≈ $28.79 MXN
- Negative: ≈ $17.19 MXN

Finally, according to its current P/S ratio, a possible spread for the next 12 months might be at:
- P/S 10: ≈ $31.24 MXN
- P/S 5: ≈ $15.63 MXN


The best analysis is yours!


J. Joel Padilla
▶️ Telegram: https://t.me/JJPL_Index




Copyright: Joel Padilla 2025

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