Santander Mexico Plunges After JPMorgan Cut: Mexico City Mover

Grupo Financiero Santander Mexico SAB (SANMEXB), the Mexican unit of Spain’s biggest bank, had its biggest two-day slide in three months after JPMorgan Chase & Co. said earnings growth is slowing and cut its rating on the stock.

The shares have tumbled 9.4 percent in the past two days to 40.19 pesos at 1:11 p.m. in Mexico City, the lowest in a month. The stock is down 11 percent from a record 45.15 on Jan 14. Santander Mexico fell 3.8 percent today.

JPMorgan analyst Saul Martinez wrote in a Jan. 16 report that he expects the Mexico City-based company’s earnings growth to slow “to the single-digit range as cost pressure mounts and, eventually, tax rates rise.” He cut his rating on the stock to the equivalent of sell from neutral.

Some investors took the JPMorgan report as a signal to lock-in gains, according to Martin Lara, a Mexico City-based analyst with Corp. Actinver SAB, who has a hold recommendation on the stock.

“That was an excuse for everybody to take profits,” Lara said in a telephone interview. “If it continues to fall it’s a good long-term investment opportunity.”

To contact the reporter on this story: Danielle Verbrigghe in New York at dverbrigghe@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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