Mexican gym operator Grupo Sports World SAB climbed for the first time this month after Banco Santander SA said an overweight population may mean faster growth for the fitness industry.
The shares surged 3.2 percent in Mexico City trading to 14.2 pesos at 4 p.m. New York time. Mexico’s benchmark IPC index declined 1.2 percent to 36,271.83.
Sports World was rated “buy” in new coverage at Santander, which assigned a target price of 25 pesos by the end of 2011, according to a note e-mailed by analyst Joaquin Ley. Sports World may take advantage of an “underpenetrated” market where only 2.3 percent of Mexicans use fitness clubs, Santander wrote in the report.
“The fitness industry in Mexico is extremely fragmented and has low penetration, boding well for Sports World’s aggressive expansion plans,” Ley wrote in the report.
The country also has an obesity problem that ranks among the worst in the world, Ley said, citing data from the Organisation for Economic Co-operation and Development.
“These details, coupled with the country’s expected economic and population growth, and the fact that it holds the highest obesity index in the world, support the company’s fast organic expansion plans,” he said.