UPDATE: UBS Upgrades Coca-Cola European Partners (CCEP) to Buy

UBS analyst Robert Krankowski upgraded Coca-Cola European Partners (NASDAQ: CCEP) from Neutral to Buy with a price target of $68.00 (from $62.00).

The analyst comments "ith growing concerns about the European consumer ahead of Q4, investors understandably may ask why now (see p. 4-6)? Compared with other names under our coverage, we believe Coca-Cola Europacific Partners (CCEP) is less sensitive to economic slowdowns or the risks of material downtrading and market share losses to private label. We also note: (1) >4% top line growth in 2023-25E (UBS +4.5%): The headline number might not screen particularly attractively in the context of European staples, but our inflation-adjusted analysis shows it to be not much different to those of the other names in the sector (see p. 18). (2) The COGS outlook for 2023 has been improving (the situation with gas in Germany, which is factored into our downside case) and cost pressures should not be as material as for European brewers (see p. 6). (3) Free cash flow (FCF) will likely be much stronger from 2022: Low exposure to emerging markets and strong cash generation (UBSe c.€1.7bn) make us relaxed about CCEP reaching its target leverage – see p. 22. We raise our rating on CCEP to Buy from Neutral with a DCF-driven price target of US$68 from US$62 (WACC 7.5% and TG of 1.5%)."

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

Shares of Coca-Cola European Partners closed at $53.48 yesterday.

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