What are the main risks posed by the Health segment to FMX shares?

Health generated revenue of 22.2 billion pesos in quarter 1 of fiscal year 2026, but it grew only 0.9% on a reported basis. Operating income declined 14.9% to 657 million pesos, with an operating margin of 3%, due to weakness in Chile and continued losses in Mexico. In Colombia, institutional operations represent slightly more than half of the company's business and face delayed payments from EPS entities. FEMSA notified EPS Sanitas, by far the largest counterparty in this business, that it would not renew the agreement when it expires in September 2026.

How is FEMSA expanding outside Mexico?

The Americas & Mobility segment generated revenue of 25 billion pesos in quarter 1 of fiscal year 2026, an increase of 12.9%, or 10.5% on a comparable, currency-neutral basis. Average same-store sales growth reached 13.1% in local currency in Chile, Peru, and Colombia, while Brazil recorded growth of 6.9% and the United States 1.7%. Operating income growth exceeded 100% on a comparable basis, but the operating margin remained at 1.1% because of OXXO Brazil's operating loss. Management expects profitability to improve gradually as scale increases, stores mature, and regional losses narrow.

What does FEMSA's dividend policy mean for shareholders during 2026 and 2027?

Shareholders approved ordinary dividends of 15.2 billion pesos between March 2026 and March 2027, with an increase of 4.5% per share from the previous year. Extraordinary dividends equivalent to 25.8 billion pesos were also approved, bringing total expected dividends to approximately 41 billion pesos. The company is also executing a 300 million-share repurchase program that it expects to complete during quarter 2 of fiscal year 2026. Management expects leverage at the end of fiscal year 2026 to remain slightly below 2 times net debt to earnings before interest, taxes, depreciation, and amortization, with the final level depending on performance in the remaining quarters.

Fomento Económico Mexicano, S.A.B. de C.V.

Factor	Score	Value	Avg	Rank
Valuation	70	21.5x	17.8x	Top tier
Growth	6	-77.3%	7.1%	Bottom tier
Quality	78	12.0%	4.5%	Top tier
Safety	61	—	2.6x	Around median
Capital Return	35	—	2.12%	Bottom tier
Momentum	75	38.2%	2.9%	Top tier
Sentiment	76	4	3	Top tier

Analyst Consensus

This section combines price targets, revision history, analyst coverage changes, and an AI summary of what changed on the Street.

Price Target· 4 analysts setting price target

$139.25

⁦+19.1%⁩

Current Price $116.95·Median $138.50

Low

$130.00

High

$150.00

Current price

$116.95

Average target

$139.25

Street summary

FMX Analyst Ratings Analysis

FMX stock shows a notable divergence between recent price targets and ratings; while the average price target stands at $139.25 (an increase of 0.54% over 30 days), which exceeds the current price of $120.12, analyst sentiment has shifted toward caution. August 2026 saw a series of rating downgrades by major institutions such as BBVA, UBS, and Santander to "Neutral," reflecting a decline in optimism despite a positive price gap even for the lowest forecasts ($130).

As of 2026-08-28

Revisions momentum · 30d

⁦0.0%⁩

Average rating

★ 3.47

Hold

Analyst coverage

Buy conviction

47%

Mixed

Rating activity · 30d

0↑ · 1↓

Target dispersion

17%

Analyst ratings over time15 analysts rating

Strong BuyBuyHoldSellStrong Sell

Rating trend — last 12 months3.86 → 3.47

Recent analyst moves

⬇ Downgrade2026-08-24
BBVA
OutperformMarket Perform
⬇ Downgrade2026-08-11
Santander
Neutral
⬇ Downgrade2026-08-06
UBS
BuyNeutral

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Key Financials

Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.

StockSector medianSector averagetypical sector range

MetricValuePosition within sectorVerdict

P/E (TTM)
21.50x
4.61x36.85x
Near median
Forward P/E
21.24x
3.86x30.86x
Above average
EV / EBITDA
9.77x
2.86x22.90x
Cheap
FCF Yield
8.8%
-37.4%14.9%
Strong
Revenue Growth YoY
-77.3%
-16.7%29.2%
Weak
EPS Growth YoY
-77.6%
-135.4%136.3%
Below average
Gross Margin
40.5%
9.2%67.5%
Above average
ROIC
12.0%
-29.3%20.8%
Strong
Net Debt / EBITDA
—
—
Dividend Yield
—
—
Payout Ratio
—
—
Altman Z-Score
—
—

Financial Analysis

Company Overview

Fomento Económico Mexicano, S.A.B. de C.V. (FEMSA) operates through a portfolio spanning retail, beverages, and digital services. Its reported segments include OXXO Mexico; Americas & Mobility, which includes OXXO stores outside Mexico and fuel operations in Mexico and the United States; Europe; Health; and Coca-Cola FEMSA. Its digital ecosystem is also linked to the Spin by OXXO platform. Revenue comes from sales at convenience stores, pharmacies, fuel stations, and beverage operations, in addition to financial services, advertising within the retail network, and income generated from supplier distribution services.

In fiscal year 2024, FEMSA recorded revenue of 781.6 billion dollars, gross profit of 321.5 billion dollars, and net income of 40.2 billion dollars, compared with revenue of 702.7 billion dollars, gross profit of 279.5 billion dollars, and net income of 76.7 billion dollars in fiscal year 2023. Accordingly, fiscal year 2024 revenue grew by approximately 11.2% and gross profit by approximately 15.0%, while net income declined by approximately 47.6% from the previous year, illustrating that business growth did not translate into bottom-line profit at the same rate.

In quarter 1 of fiscal year 2026, consolidated revenue increased 6.1% and operating income increased 5.5% year over year, or 8.5% and 12.1%, respectively, on a comparable, currency-neutral basis. OXXO Mexico led performance with revenue growth of 8.3% and operating income growth of 20.9%, with a gross margin of 46.2% and an operating margin of 7.6%, while Americas & Mobility generated revenue of 25 billion pesos and an operating margin of 1.1%. Consolidated net income reached 17.6 billion pesos, an increase of 97.3%, but excluding a one-time non-cash accounting gain related to the combination of BradyPLUS and Imperial Dade reduces it to 5.7 billion pesos, representing a year-over-year decline of 36.4%.

What's Driving the Stock

The recovery of OXXO Mexico is the most prominent operating driver: same-store sales grew 6% in quarter 1 of fiscal year 2026, 158 net new stores were added, the gross margin expanded by 140 basis points, and the operating margin expanded by 80 basis points, despite average customer traffic remaining slightly negative.
FEMSA is expanding rapidly outside Mexico; same-store sales in Chile, Peru, and Colombia increased by a weighted average of 13.1% in local currency in quarter 1 of fiscal year 2026, while growth reached approximately 6.9% in Brazil and 1.7% in the United States. Americas & Mobility achieved revenue growth of 12.9%, and its operating income growth exceeded 100% on a comparable basis, despite OXXO Brazil's current operating loss.
Spin by OXXO reached 11 million active users and more than 100 million monthly transactions, while weekly active users approached 5 million in quarter 1 of fiscal year 2026. Spin's share of OXXO payments exceeded 50%, and management aims to increase it toward 66%, while transaction growth and cost reductions are helping narrow the platform's losses.
Store initiatives support the growth trajectory, as coffee cups sold per store at OXXO Mexico increased from 28 cups in quarter 1 of fiscal year 2025 to 30 cups in quarter 1 of fiscal year 2026, while the company is also working to expand breakfast offerings and everyday essentials. At Bara, same-store sales grew at a double-digit rate, 38 net new stores were opened, and private labels approached 30% of the revenue mix.
The capital allocation policy supports shareholders; ordinary dividends of 15.2 billion pesos were approved for the period between March 2026 and March 2027, an increase of 4.5% per share, in addition to extraordinary dividends of 25.8 billion pesos. Total expected dividends amount to approximately 41 billion pesos, alongside a 300 million-share repurchase program expected to be completed during quarter 2 of fiscal year 2026.

Buying & Selling Case

▲ Buying Case4 pts

+The improvement at OXXO Mexico represents tangible operating evidence, as in quarter 1 of fiscal year 2026 it combined revenue growth of 8.3%, gross margin expansion of 140 basis points, and operating income growth of 20.9%, along with market-share gains against traditional stores according to management's assessment.
+International expansion gives FEMSA an additional growth path; same-store sales growth exceeded 20% in local currency across Latin America markets excluding Brazil, according to management's presentation, while losses from OXXO operations in the region narrowed and Colombia achieved earnings before interest, taxes, depreciation, and amortization during the previous year.
+Spin combines a large user base with direct integration into the OXXO network, with 11 million active users and more than 100 million monthly transactions. The expansion of payments, transfers, personalized offers, and advertising across a network of approximately 6,500 digital screens could increase store traffic and service-based revenue streams.
+The company demonstrates discipline in its return on capital, having reduced capital expenditure in quarter 1 of fiscal year 2026 by 29.5% to 6.2 billion pesos, alongside a review of underperforming stores. The March 2026 to March 2027 plan also combines expected dividends of 41 billion pesos with an extensive share repurchase program.

Valuation

The analyst consensus rates FMX shares as a “Buy,” with an average target of 139.25 dollars and a range between 130 and 150 dollars; the average target is approximately 1.6% below the 52-week range high of 141.47 dollars, while the highest target exceeds that high by approximately 6.0%. A price-to-earnings ratio is not available in the data, so this positive consensus should be weighed against the 47.6% decline in fiscal year 2024 net income and the 36.4% decline in adjusted net income in quarter 1 of fiscal year 2026, in addition to the margin pressures announced on August 5, 2026.

BuyAnalyst target: $139.25(+19.1%)

Figures in the text are as of 2026-08-27; the live price is shown at the top of the page.

FAQ

What was the most important driver of FMX's results in quarter 1 of fiscal year 2026?

The recovery of OXXO Mexico was the clearest driver, with revenue growth of 8.3% and same-store sales growth of 6%. The segment added 158 net new stores, and its gross margin expanded by 140 basis points to 46.2%. Operating income increased 20.9%, lifting the operating margin by 80 basis points to 7.6%. Nevertheless, average customer traffic remained slightly negative during the period.

Why did FEMSA's net income rise sharply despite profitability pressures?

Consolidated net income reached 17.6 billion pesos in quarter 1 of fiscal year 2026, a year-over-year increase of 97.3%. The decisive portion of the increase came from a one-time non-cash accounting gain related to the combination of BradyPLUS and Imperial Dade. Excluding this item, net income was 5.7 billion pesos and declined 36.4% year over year. The company attributed the adjusted decline to higher financing expenses, a foreign exchange loss, lower interest income, and the absence of profits from discontinued operations recorded in the comparable period.

How large is the Spin by OXXO opportunity within FEMSA's ecosystem?

Spin had 11 million active users, with more than 100 million monthly transactions and weekly active users approaching 5 million in quarter 1 of fiscal year 2026. Spin's share of OXXO payments exceeded 50%, while management aims to increase it toward 66%. FEMSA uses the platform for person-to-person transfers, payments, targeted offers, and connecting customers with stores. Spin's data can also support OXXO's advertising network, which includes approximately 6,500 operational digital screens.

−The Health business in Colombia presents a direct credit risk because institutional operations represent slightly more than half of the company's business in the country and depend on EPS entities that face funding gaps. Receivables accumulated despite reduced exposure, and management identified EPS Sanitas as by far the largest counterparty, with the possibility that some EPS entities could become insolvent and that the Sanitas agreement will not be renewed when it expires in September 2026.
−Health's profitability faces weakness on multiple fronts; gross profit declined 10% and operating income declined 14.9% in quarter 1 of fiscal year 2026, while the operating margin was 3%. Growth in Colombia and Ecuador only partially offset the decline in Chile, where the mix shifted toward lower-margin medicines such as GLP-1 treatments, while losses in Mexico continued.
−OXXO Mexico's 140-basis-point margin increase does not appear fully repeatable; management cautioned against assuming it would continue in the second half of fiscal year 2026 because some supplier agreements and commercial income may not recur, and because part of the margin gains may be returned to consumers through more attractive pricing. The second-quarter results published on August 5, 2026 confirm continued margin pressure and declining profits at international units despite revenue and earnings exceeding expectations.
−Customer traffic growth at OXXO Mexico remains fragile, as average traffic stayed slightly negative in quarter 1 of fiscal year 2026 despite improving from the previous year. Disruptions in February 2026 also led to store closures, and traffic was weaker in Jalisco, Nayarit, southern Mexico, and areas affected by lower remittances and international tourism.
−International operations face competitive and operational challenges; the European B2B business remained weak due to competition, and the German retail and foodservice businesses performed poorly, while OXXO Brazil continues to record an operating loss and a lower gross margin than Chile, Peru, and Colombia. As a result, the Americas & Mobility margin remained at only 1.1% in quarter 1 of fiscal year 2026.
−Reported net income includes lower earnings quality than the nominal increase suggests; the rise to 17.6 billion pesos in quarter 1 of fiscal year 2026 depended on a one-time non-cash accounting gain. Without this gain, net income declined 36.4% to 5.7 billion pesos due to higher financing expenses, foreign exchange losses, lower interest income, and the absence of a 2.5 billion-peso contribution from discontinued operations that was present in the comparable period.

Company Profile

FMX Fomento Económico Mexicano, S.A.B. de C.V.

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