Bloomberg -- Grupo Famsa SAB, the Mexico operator of Famsa and Verochi retail stores, fell the most in two months after Banco Santander SA downgraded the stock, citing its “pricey” valuation.

The shares were cut to “underperform” from “buy,” Santander analysts Joaquin Ley and Roberto Liano wrote in a note to clients yesterday.

Famsa is up 780 percent in U.S. dollar terms since March and trades at a “slight premium” of 7.8 percent compared with peers in Mexico based on this year’s estimated earnings, they said.

“We find this valuation hard to justify given the volatile nature of Famsa’s business, considering its exposure to durables and, more importantly, to credit,” Ley and Liano wrote.

The Monterrey, Mexico-based retailer fell 4 percent to 29.92 pesos in Mexico City trading, its steepest drop since Nov. 26.

Source: www.bloomberg.com