Coca-Cola (KO) PT Lifted 6% at UBS

UBS analyst Stephen Powers reiterated a Buy rating while raising estimates and his price target on Coca-Cola (NYSE: KO) to $52.00 (from $49.00) on news it is re-segmenting its N. American bottling operations and on better FX.

"Last week, KO released an 8-K re-segmenting its N. American bottling operations to BIG," Powers commented. "Accordingly, we have restated 2014/2015 historicals. Moreover, going forward, we have raised our future estimates based on three factors: (1) higher-than-expected (if still suboptimal) base KO-N. America margins of ~26% vs. ~23% previously forecasted, (2) more favorable FX (now only a -1.5% top-line headwind in FY16 vs. a -4.0% headwind previously forecasted), and (3) greater cost savings given $300M+ in apparent stranded costs within legacy CCR that were not included in KO's stated $3B cost savings target."

He added, "We note, however, that given KO's anticipated hedged positions on FX and the timing of stranded cost removals, we do not expect the majority of these benefits to flow through KO's income statement until FY18. Accordingly, our FY16, FY17, and FY18 EPS estimates rise 1%, 1%, and 6%, respectively (to $1.98, $2.08, and $2.31—each ahead of consensus). Our 12-month price target also rises 6% to $52."

For an analyst ratings summary and ratings history on Coca-Cola click here. For more ratings news on Coca-Cola click here.

Shares of Coca-Cola closed at $46.83 yesterday.

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