E-Malt.com News article: 1103

Deutsche Bank has reported on May 20 it was beginning coverage of Mexican beer company Grupo Modelo with a "hold" rating, saying the company "is not an exciting story for the next 12 months," according to Reuters. Deutsche analyst Marco Vera said in a report he expects Modelo's earnings before interest, taxes, depreciation and amortization (EBITDA) to grow 5 % in 2003, in real peso terms.

Crediting Modelo's cautious past strategies for helping the company weather the current economic slowdown, Deutsche criticized the beer brewer's capital structure as a source of underexploited capital. But Deutsche applauded the recent appointment of Ernesto Alcalde as chief financial officer. "We are full-on Alcalde fans," said Vera, describing Alcalde, formerly of beverage company Panamco, as a seasoned strategist.

Deutsche assigned Modelo - the maker of Corona beer, the top selling foreign brew in the United States - a 12 month price target of 26 pesos per share. The stock, off close to 10 % in 2003, most recently closed at 23 pesos. Modelo claimed a 56.9 % stake in the Mexican beer market as of the first quarter, while Monterrey-based rival Femsa caters to most of the remaining market.


21 May, 2003