Our 12-month target price for Alsea of P$60 is based on SOTP DCF analysis. In our DCF, we use a WACC of 9.8% and terminal growth rate of 2.1%. At our target price, the implied multiple would be 6x forward EV/EBITDA.

(1) Susceptibility to margin erosion in the event of significant slowdown in sales growth and discretionary spending. (2) Higher-than-anticipated commodity prices such as Coffee and Cheese impacting profitability. (3) Execution risk on acquisitions as Alsea has grown also through acquisitions, which carry risks, such as price discipline, financial leverage, and integration risk.