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US: Coke splits analysts' recommendations

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Two analysts issued conflicting notes on Coca-Cola late last week. The analysts issued the recommendations after Coca-Cola Enterprises, Coke's largest bottler, lowered its earnings guidance for the year.

On Friday (10 September), UBS lowered its rating on Coke by two notches to "reduce" from "buy", saying the latest disappointing figures may prompt the company's new chief executive, Neville Isdell, to launch an aggressive and expensive restructuring. The firm slashed its price target for the company to US$34 from US$60.

Legg Mason, meanwhile, told clients that the stock is oversold, that the global sales environment is improving and that the new CEO will implement a plan that would revive sustainable growth. The firm upgraded the company to "buy" from "hold" and added it to its "Select List."

"After years of poor results, investors may be reluctant to assume success until results are delivered," said UBS analyst Caroline S. Levy.

"We expect Mr. Isdell and team to clarify a strategy that is both sound, achievable, and attractive versus market expectations," countered Legg Mason analyst Mark Swartzberg.


Sectors: Soft drinks

Companies: Coca-Cola Enterprises

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