Coca-Cola Europacific’s share price was raised to stable growth by Investing.com
On Tuesday, CFRA raised their price target on Coca-Cola (NYSE:) Europacific Partners (NASDAQ:CCEP) stock to $82.00, from $77.00 previously, while maintaining a hold rating on the stock. The new target price suggests a trailing 12-month price-to-earnings (P/E) ratio of 17.4 times, which is slightly below the peer group’s P/E ratio of 18.0 times. The adjustment reflects the company’s superior strength compared to its peers.
Coca-Cola Europacific Partners reported third-quarter 2024 revenue of €5.36 billion, in line with consensus estimates. The company achieved an exchange-neutral growth of 2.4%, driven by a 2.4% price increase, while volume remained unchanged from last 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, overall volume growth was affected by mixed weather conditions and soft consumer demand in Europe, which fell by 1.4%. The analyst noted that Coca-Cola Europacific Partners performed well in the market, especially in the Philippines, where it was able to successfully navigate the strong comparisons from the previous year.
Despite the positives, the company lowered its comparable growth guidance to around 3.5%, down from the 4.0 previously expected. This revision is somewhat disappointing, but it is not expected to cause a significant deviation from the current consensus target of 3.8% growth in 2024.
The hold rating was maintained by CFRA as the company does not foresee any factors that could have a significant impact on the stock’s performance in the near term.
In other recent news, Coca-Cola Europacific Partners saw mixed conditions in the third quarter. Citi revised its Q3 group volume growth estimate to +1.1% and organic sales growth to +3.2% for the company.
The company also revised the group’s full-year 2024 organic sales growth and organic EBIT growth forecasts to +3.5% and +6.5%, respectively. Despite these updates, Citi maintains a buy rating on the stock and expects the company’s management to reaffirm its metrics for the full year 2024.
Barclays (LON:) reaffirmed its confidence in Coca-Cola Europacific Partners, maintaining an Overweight rating despite the company’s challenging second quarter. The investment company emphasizes the company’s strong fundamental demand and competitive position, indicating stability for the current year and the future.
Citi expects growth in the Asia-Pacific South region and expects a slight increase in first-half volume, primarily driven by better performance in the Philippines. Despite expecting a subdued second quarter of European operations due to poor weather, both Barclays and Citi suggest that Coca-Cola Europacific Partners management is unlikely to change their guidance for the full year 2024 at this time.
These recent developments demonstrate the resilience of Coca-Cola European Partners’ (NASDAQ:)’ business model and effectiveness in the face of market volatility.
InvestingPro Insights
Coca-Cola Europacific Partners (CCEP) presents a mixed financial picture consistent 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, which is slightly higher than the average of the peer group mentioned in the article. This estimate is supported by strong revenue of $20.52 billion in the last twelve months from Q2 2024, with revenue growth of 6.31% over the same period.
InvestingPro Tips highlights that CCEP has raised its dividend for 3 consecutive years, which could be attractive to income-oriented investors. paid a dividend of 2.08 %. This increase in fixed income is in line with the company’s profitability, as analysts predict that CCEP will remain profitable this year.
However, investors should note that analysts expect sales to decline in the current year, consistent with the company’s reduced comparable growth guidance mentioned in the article. This may explain why CFRA is maintaining a hold rating despite raising the target price.
For a comprehensive analysis, InvestingPro offers 6 additional CCEP tips, which provide in-depth information about the company’s financial health and market conditions.
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