On Tuesday, CFRA has increased the stock price target for Coca-Cola (NYSE:) Europacific Partners (NASDAQ:CCEP) to $82.00, up from the previous $77.00, while keeping a Hold rating on the stock. The new price target suggests a 12-month forward price-to-earnings (P/E) ratio of 17.4 times, which is slightly below the peer group’s average P/E of 18.0 times. The adjustment reflects the company’s higher leverage compared to its peers.
Coca-Cola Europacific Partners reported third-quarter 2024 revenues of €5.36 billion, aligning with the consensus estimates. The company achieved a foreign exchange-neutral comparable growth of 2.4%, attributed to a price increase of 2.4%, while volume remained unchanged from the previous year.
Despite flat volume growth, the company’s performance in the Australia, Pacific & Southeast Asia region was strong, with a 3.3% increase that met expectations.
However, the overall volume growth was affected by mixed weather conditions and softer consumer demand in Europe, which saw a 1.4% decline. The analyst noted that Coca-Cola Europacific Partners has performed effectively in market executions, particularly in the Philippines, where it has successfully navigated past strong comparables from the prior year.
Despite the positive aspects, the company has reduced its comparable growth guidance to approximately 3.5%, a decrease from the previously anticipated 4.0%. This revision is somewhat disappointing, but it is not expected to cause significant deviation from the current consensus target of 3.8% growth for 2024.
The Hold rating has been maintained by CFRA as the firm does not foresee any immediate catalysts that could significantly influence the stock’s performance in the near term.
In other recent news, Coca-Cola Europacific Partners has seen mixed conditions in the third quarter. Citi has adjusted its Q3 group volumes growth estimate to +1.1% and organic sales growth to +3.2% for the company.
The firm also revised its full-year 2024 group organic sales growth and organic EBIT growth forecasts to +3.5% and +6.5%, respectively. Despite these revisions, Citi maintains a Buy rating on the stock and expects the company’s management to reaffirm its full-year 2024 guidance metrics.
Barclays (LON:) also reaffirmed its confidence in Coca-Cola Europacific Partners, maintaining an Overweight rating despite a challenging second quarter for the company. The investment firm emphasizes the company’s strong underlying demand and competitive positioning, projecting stability for the current year and the future.
Citi anticipates growth in the Asia-Pacific South region and expects a slight increase in first-half volumes, primarily driven by better performance in the Philippines. Despite anticipating a subdued second quarter for European operations due to unfavorable weather conditions, both Barclays and Citi suggest that Coca-Cola Europacific Partners’ management is unlikely to alter their full-year 2024 guidance at this time.
These recent developments reflect the resilience of Coca-Cola European Partners (NASDAQ:)’ business model and operational effectiveness amidst market fluctuations.
InvestingPro Insights
Coca-Cola Europacific Partners (CCEP) presents a mixed financial picture that aligns with CFRA’s Hold rating. According to InvestingPro data, CCEP’s market capitalization stands at $34.93 billion, with a P/E ratio of 19.9, slightly higher than the peer group average mentioned in the article. This valuation is supported by a solid revenue of $20.52 billion over the last twelve months as of Q2 2024, with a revenue growth of 6.31% during the same period.
InvestingPro Tips highlight that CCEP has raised its dividend for 3 consecutive years, which may appeal to income-focused investors. The current dividend yield is 2.08%, with a dividend growth of 6.76% over the last twelve months. This consistent dividend increase aligns with the company’s profitability, as analysts predict CCEP will remain profitable this year.
However, investors should note that analysts anticipate a sales decline in the current year, which corresponds with the company’s reduced comparable growth guidance mentioned in the article. This could explain why CFRA maintains a Hold rating despite raising the price target.
For a more comprehensive analysis, InvestingPro offers 6 additional tips for CCEP, providing deeper insights into the company’s financial health and market position.
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