The group is expected to get listed on the FTSE 100 in London

The group is expected to get listed on the FTSE 100 in London

The positive long-term prospects for Coca-Cola HBC are outweighed by its short-term struggles, but the company should return to high-teens earnings growth by its next financial year, according to an analyst.

The group, which is expected to join the FTSE 100 next week after switching its stock listing from Athens to London earlier this year, reported a sharp drop in first-half net profits last month. The company, the Coca-Cola Co's second largest bottler, said its earnings were dragged down by soft volumes due to unemployment in some of its key regions.

But, in a note today (3 September), JP Morgan analysts said that a macro-economic recovery in Europe, notably in Italy, could “significantly accelerate CCHBC's volume, channel mix and pricing recovery”. 

“With minimal input cost pressures, continued volume growth in key emerging markets and the potential for volume recovery in established markets, CCHBC should return to high teens earnings growth in FY14,” the note said.

Looking ahead, JP Morgan said that it expects the group to deliver 18% EPS growth in 2014 and 2015 fiscal years, after an 11% rise this year.

CCHBC's shares in London have “outperformed” the market and other beverage companies since listing on the London Stock Exchange, JP Morgan flagged.

Expert analysis

Coca-Cola Hellenic Bottling Company S.A. - Mergers & Acquisitions (M&A), Partnerships & Alliances and Investment Report

Coca-Cola Hellenic Bottling Company S.A. - Mergers & Acquisitions (M&A), Partnerships & Alliances and Investment Report

MarketLine's Company Mergers & Acquisitions (M&A), Partnerships & Alliances and Investments reports offer a comprehensive breakdown of the organic and inorganic growth activity undertaken by an organi...read more