HSBC has released a fresh list of preferred equities for investors focused on Latin America, naming seven companies across Brazil and Mexico that it believes offer attractive risk-reward profiles. The bank emphasizes themes such as commodity super-cycle exposure, energy market sensitivity and domestically driven expansion as the common threads among its selections.
Overview
The slate highlights a mix of large-cap resource names, energy generators with uncontracted capacity, consumer staples and services with expansion potential, and financial and infrastructure plays with differentiated market positions. Brazilian companies occupy the majority of the top positions while Mexican companies provide complementary exposure to consumption, airports and retail finance.
Company highlights
1. Vale (VALE US) - Brazil
HSBC rates Vale as a commodity "select" that benefits from super-cycle dynamics. The bank notes Vale’s global leadership in iron ore, citing an output of 336 million tons in 2025 as a source of scale and market relevance. HSBC also points to Vale’s nickel holdings and a credible copper expansion plan as ways the company gains exposure to energy transition demand, including electric vehicles and broader electrification needs. Management changes following the CEO appointment in October 2024 are described as driving improved execution, higher efficiency and better operating performance. HSBC highlights an appealing valuation and the potential for capital returns as cash generation improves. The bank also records that Vale reported first-quarter 2026 results in which both earnings per share and revenue missed analyst forecasts, and that RBC Capital maintained a Sector Perform rating on the shares while noting the attractiveness of Vale’s Base Metals division.
2. Axia Energia (AXIA3 BZ) - Brazil
Axia is presented as a direct beneficiary if power prices remain elevated, with HSBC characterizing the company as offering best-in-class leverage to higher energy through significant uncontracted capacity. The company’s generation portfolio is described as high-quality and 100% hydro-based, supporting resilient cash generation and a favorable environmental, social and governance profile. HSBC also highlights a visible regulated growth path via increased investment in regulated transmission networks that deliver double-digit returns on equity. Financial metrics cited include a 1.9x net debt/EBITDA ratio and 58% of debt linked to CDI, positioning the company to benefit from rate cuts.
3. FEMSA (FMX US) - Mexico
HSBC points to FEMSA as a combination of growth and capital returns. Following a divestment of non-core assets, the company is increasingly focused on Oxxo and KOF, which the bank says improves transparency and concentrates management attention. HSBC calls out Oxxo’s substantial expansion runway across Mexico and select Latin American markets, and notes that both Oxxo and KOF are leveraging digital tools to accelerate revenue growth and lift returns on invested capital.
4. Embraer (EMBJ US) - Brazil
The aircraft manufacturer is highlighted for structural growth underpinned by a $31.6 billion backlog and a 2.8x book-to-bill ratio, according to HSBC. The bank notes limited direct geopolitical exposure, demand supported by delivery constraints in the market and incremental defense demand as positive factors for visibility into future revenue.
5. PRIO (PRIO3 BZ) - Brazil
As a pure-play exploration and production company, PRIO is presented as offering meaningful upside to Brent crude price moves. HSBC references production growth driven by the Wahoo startup as supporting PRIO’s goal of reaching 200,000 barrels per day. The bank also points to strong free cash flow as the basis for a 10% buyback program.
6. OMA (OMAB MM) - Mexico
OMA, the operator of Monterrey Airport, is noted for its strategic position in Mexico’s industrial corridor. HSBC highlights that Monterrey will host four World Cup matches with roughly 2.2 million visitors expected, and that the airport stands to gain from nearshoring-driven investment in the region.
7. Gentera (GENTERA MM) - Mexico
HSBC describes Gentera as one of the most attractive stories among Latin American financials, citing sustainable high profitability with a 25% return on average equity, resilient double-digit growth and a strong competitive position in Mexico’s underpenetrated low-income lending segment.
Summary and implications
The bank’s choices underscore several investable themes across Latin America: exposure to commodity and base metals cycles, energy generation firms with leverage to power prices and regulated transmission growth, consumer-facing companies consolidating core businesses and improving returns, and financial services focused on underpenetrated segments. The selection suggests HSBC views both resource-based and domestically oriented companies as complementary ways to access regional upside.