CCE has the ability to grow despite its European exposure, analysts say

CCE has the ability to grow despite its European exposure, analysts say

Coca-Cola Enterprises (CCE) should be a “solid long-term growth story” despite its large footprint in the stagnant markets of Europe, according to an analyst.

In a note released today (12 October), CLSA said it sees several “growth levers” for the Coca-Cola bottler. These include sustainable per-capita consumption gains, margin expansion and the ability to execute acquisitions and/or greater share repurchases.

The group also has the option to buy Coca-Cola Co’s bottling in Germany until May 2013, the analysts noted. “We expect either a favourable deal for CCE or an announcement of large-scale share repurchases,” the note said.

CLSA also raised its estimates to “reflect better currency”. “Our 2012 EPS is now US$2.25 (was $2.20) and our 2013 EPS is now $2.67 (was $2.50),” it added. 

“We raise our target to $36 from $33, but lower our rating to O-PF from buy as we now expect more moderate 15% total return.” 

CCE's net profits slid by 10.8% to US$314m in H1 this year due to "unfavourable weather and ongoing marketplace challenges" in Q2.

The company will release its Q3 results on 22 October.