The average target price of VESTA.MX is 60 and suggests 11% upside potential. Usually, this means a HOLD recommendation among investment firms. This neutral recommendation suggests no significant price movement, up or down, in the next 12 months. The most optimistic analyst has a target price of 73.0. This translates into 35% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 43.0. This is equivalent to 21% downside potential in the worst case. 

Corporación Inmobiliaria Vesta, S.A.B. de C.V., together with its subsidiaries, acquires, develops, manages, operates, and leases industrial buildings and distribution centers in Mexico. As of December 31, 2021, the company owned 189 properties located in industrial parks in 15 states of Mexico. It serves e-commerce/retail, aerospace, automotive, food and beverage, logistic, medical device, plastic, and other industries. The company was incorporated in 1996 and is headquartered in Mexico City, Mexico.

Mexico

Corporación Inmobiliaria Vesta, S.A.B. de C.V.

Real Estate

The company has a track record of regular dividend payments. It has paid dividends in each of the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are unclear. In the past 12 months, the dividend yield has been good and slightly above its peers. The company distributes nearly all its profit as dividends (payout ratio above 90%, a negative factor). It will not be easy to sustain such an extreme payout ratio. It may also indicate a company's lack of profitable growth opportunities, which suggests doubtful prospects. On average, the company pays dividends quarterly, which may appeal to investors valuing a regular income stream. 

VESTA.MX reported revenue of USD 259mn in the last 12 months, up 3% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 5% from FY24 to USD 2.16. Market expects EPS to reach USD 0.30 in FY25.

The stock has been growing steadily in the past six months, adding 4% in total. The stock has outperformed its global peers from the same sector and industry (as shown above), surpassing them by 13ppts in total. At the same time, the stock's performance relative to its the peers from the same country and sector is different. The stock outperformed these peers by 0ppts over the past six months and grew 13ppts faster in the past month. With respect to the stock's valuation against its peers, its overall price performance is neutral.

Another important profitability metric, return on assets (RoA), amounted to 3.0% in the last 12 months, a decrease from 10.1% in FY23. The market analysts predict that RoA will be 7.9% in FY24, more robust than its peers in this period. 

Corporación Inmobiliaria Vesta, S.A.B. de C.V. reported a return on equity (RoE) of 4.5% in the last 12 months, down from 16.5% in FY23. The market consensus projects an RoE of 11.7% in FY24, this time above its peers. 

In the last 12 months, the return on capital employed (RoCE) declined to 3.1%, below the peers. The consensus estimate for FY24 for RoCE is 6.2%, again behind the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 2.2 in the past several years. This ratio implies a strong shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are close to minimal. In combination with rigorous business standards, shareholder rights are well protected.

VESTA.MX has above average trading liquidity. The average private investor can sell his common position in the stock almost immediately. Liquidity is usually quite stable and is average on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. 

No other major risks have been identified.

The risk of default is moderate. We note robust profitability and an favourable capital structure, among the positive credit factors. Among the negative credit factors, we point to excessive margin volatility.

In highly turbulent market conditions, VESTA.MX is not volatile. In other words, the stock will fall far less than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be very low. 

In normal market circumstances, VESTA.MX is not volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will stay within a narrow range. The stock's losses on its worst days (less than 1-5% of the time) will range from very low to negligible. We would also like to highlight the negligible intraday volatility of the instrument. 

From both historical and forecast perspectives, the stock is slightly overpriced compared to similar stocks. Specifically, the stock is 'expensive' on P/E, neutral on EV/EBITDA, reasonably priced on P/FCF. 

Corporación Inmobiliaria Vesta, S.A.B. de C.V.

MX$ 54.72

6

Corporación Inmobiliaria Vesta, S.A.B. de C.V.

MX$ 54.72

6

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

MX$ 54.72

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