CUERVO MM

Becle SAB de CV

Consumer


Presented:10/09/2020
Price:MX$46.67
Cap:$11.35B
Current Price:MX$28.85
Cap:$6.89B

Presented

Date10/09/2020
PriceMX$46.67
Market Cap$11.35B
Ent Value$10.92B
P/E Ratio38.97x
Book ValueMX$15.14
Div Yield0.66%
Shares O/S3,654.04M
Ave Daily Vol1,475,683
Short IntN/A

Current

PriceMX$28.85
Market Cap$6.89B
Becle SAB de CV is a alcoholic beverage producing company. It is engaged in manufacturing, distribution, export, import, bottling, and marketing of distilled alcoholic and non-alcoholic beverages including tequila, whiskey, and rum. The company was founded in 1758 and is headquartered in Mexico City, Mexico.

Publicly traded companies mentioned herein: Becle SAB de CV (CUERVO MM), Brown-Forman Corp (BF/B), Diageo PLC (DEO, DGE LN), Pernod Ricard SA (RI FP), Remy Cointreau SA (RCO FP)

Highlights

The presenter is long shares of Becle SAB de CV (CUERVO MM), which is best known for its Jose Cuervo tequila brand. While CUERVO has other spirits, including some solid whiskey brands (e.g., Pendleton, Bushmills, etc.), its tequila brands represent 61% of total revenue. The presenter notes that tequila as a category has strong trends, which could drive HSD% – LDD% annual revenue growth for the company over a multi-year period. He also believes CUERVO can expand its margins as the business increases its vertical integration in the tequila category. Overall, the presenter expects a 25% earnings CAGR over the next five years and values the company at 30x his 2023 earnings estimate. This leads him to a price target of ~₱80 in the next two years (~75% upside). 

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Idea Discussion

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