UBS Raises BBB Foods (TBBB) PT to $33, Keeps Neutral Rating

On Wednesday, UBS raised its price target for BBB Foods Inc. (NYSE:TBBB) from $32 to $33, while maintaining a Neutral rating on the company’s shares. This upward revision by UBS reflects the firm’s updated analysis of BBB Foods’ market position and prospects.

BBB Foods’ total revenues increased by 35% year-over-year in Q1 2025 to MXN 17.132 billion. Same-store sales also saw growth of 13.5%. The company continued its expansion and opened 117 net new stores during the quarter, which brought the total store count to 2,889 as of March 31. Cash flow from operating activities increased by 49% year-over-year and reached MXN 1.1 billion. BBB Foods maintains a strong net cash position of MXN 1.6 billion, which is supplemented by an additional $150 million

However, the company’s sales expenses as a percentage of revenue slightly increased from 10.2% to 10.3%, primarily due to the accelerated pace of new store openings. Administrative expenses rose by 0.06%, from 3.5% to 4.1% of revenue, which was partly influenced by an increase in non-cash share-based payments, which reached MXN 213 million in Q1 2025, compared to MXN 129 million in Q1 2024. This increase in share-based compensation, which is ~8% of gross profit, raises concerns about potential future dilution.

BBB Foods Inc. (NYSE:TBBB) operates a chain of grocery retail stores in Mexico.

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Disclosure: None. This article is originally published at Insider Monkey.