The investment bank UBS Warburg increased its net profit forecasts for the soft drink bottler and producer Coca Cola Amatil and in doing so lifted its recommendation to “Buy 2”.
The bank’s net profit forecast was lifted by 3.4%.
In a research note, UBS analysts said Amatil’s recent annual general meeting highlighted management expectations that return on capital employed (ROCE) will improve by 100-150 basis points, net profit will rise 10-15% in 2003 and earnings per share will grow at 12-15%.
“We have raised our valuation from A$5.60 to A$5.87 and price target from A$5.72 to A$6.20. Due to recent share price weakness, change in forecast earnings and lower capital employed forecast, we have increased our rating from “Neutral 2” to “Buy 2″ with 14% potential upside to our share price target,” the bank said.
