Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - Goldman Sachs initiated coverage on BBB Foods Inc (NYSE:TBBB) with a Neutral rating and a $29.00 price target, representing 10% potential upside. According to InvestingPro data, the stock currently trades at a P/E ratio of 166x and shows mixed valuation signals, with analyst targets ranging from $28.35 to $43.92.
The investment bank’s analysis focuses on the Mexican hard discounter Tiendas 3B, which has been rapidly expanding its store network with a sales area compound annual growth rate (CAGR) of 25% between 2022 and 2024.
As of the first quarter of 2025, TBBB has reached 2,889 store locations, yet still represents only 2% of Mexico’s grocery retail market based on fiscal year 2024 data.
Goldman Sachs projects TBBB’s revenues to grow at an average rate of 27% annually from 2025 to 2027, compared to 36% annual growth from 2022 to 2024.
The firm expects TBBB’s cash net income to increase by 77% during the 2025-2027 period, with recurring post-IFRS EBITDA margins gradually rising to 5.6% in 2027 from 5.2% in 2024.
In other recent news, BBB Foods Inc. has filed its Annual Report on Form 20-F for the fiscal year ending December 31, 2024, with the U.S. Securities and Exchange Commission. This report provides a detailed overview of the company’s financial performance, including audited financial statements, and is accessible to the public. The company’s recent financial disclosures also include a revision of its lease payment figures for the fourth quarter and full year of 2024, adjusting them to Ps. 378 million and Ps. 1,389 million, respectively. Despite these revisions, BBB Foods reported substantial growth, with a 32.7% increase in quarterly revenue and a 30.3% increase for the full year, reaching Ps. 57,439 million. The company also achieved a 51.1% increase in fourth-quarter EBITDA to Ps. 845 million and a full-year EBITDA of Ps. 2,847 million, marking a 51.2% growth. The expansion included the opening of 138 new stores in the fourth quarter, contributing to a total of 484 new stores for the year. Looking forward, BBB Foods plans to open between 500 and 550 new stores in 2025, with projected revenue growth of 26% to 29%. These developments underscore the company’s rapid growth and strategic expansion in the grocery retail sector.
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