Salsa Maker Herdez Rallies on Citigroup’s Buy: Mexico City Mover

Grupo Herdez SAB (HERDEZ*), Mexico’s biggest producer of canned foods, rose the most in two weeks after Citigroup Inc. recommended buying its stock.

Shares of the company, known for its namesake salsas, climbed 3.2 percent to 44.96 pesos at 2:39 p.m. in Mexico City, the biggest gain on a closing basis since Aug. 7. The IRT Small Capitalization index of 20 Mexican companies, including Herdez, rose 0.9 percent, while the benchmark IPC rose 0.6 percent.

Herdez’s purchase this year of a controlling stake in frozen-yogurt distributor Grupo Nutrisa SAB has proven to be profitable, Citigroup analysts Julio R. Zamora and Marcela Munoz wrote in a research note to clients published yesterday. The dessert division is now worth 10.4 billion pesos ($801 million), more than three times the 2.97 billion pesos Herdez paid in May, according to the analysts, who raised their recommendation to buy from neutral.

Citigroup’s price target of 59 pesos implies a 35 percent return from yesterday’s close. Mexico City-based Herdez has advanced 13.3 percent this year.

To contact the reporter on this story: Jonathan Levin in Mexico City at jlevin20@bloomberg.net

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

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