EUROPE: Coca-Cola Enterprises has "growth levers" despite Europe exposure - analyst

By | 12 October 2012

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.

Expert analysis

Coca-Cola Enterprises, Inc. (CCE) - Financial and Strategic SWOT Analysis Review

Coca-Cola Enterprises, Inc. (CCE) engages in marketing, production, and distribution of non alcoholic beverages. The product portfolio of the company includes energy drinks, sparkling waters, juices, sports drinks, fruit drinks, coffee-based beverages, tea and non alcoholic beverages. Its products are sold under the brands. In addition, CCE is also engaged in the distribution of Dr Pepper and other notable brands. CCE serves consumers throughout Belgium, continental France, Great Britain, Luxembourg, Monaco, the Netherlands, Norway, and Sweden. The company’s focuses on utilizing its operational and marketing capacity and leveraging the upcoming events including London Olympics and the European soccer championships. The company is headquartered at Atlanta in Georgia, the US.

Sectors: Company results, Soft drinks

Companies: Coca-Cola Enterprises, Coca-Cola Co

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