On Friday, Bernstein analysts at SocGen Group adjusted their price target for Coca-Cola (NYSE:KO) Europacific Partners (CCEP:NA) (NASDAQ: CCEP), a $35.4 billion market cap company, increasing it to EUR78.90 from the previous EUR77.50. The firm maintained its Market Perform rating on the stock, with the shares currently trading at $76.31.
In their analysis, Bernstein highlighted the company's robust fundamentals, which they described as well understood by the market. They forecast approximately 4.8% normalized net sales growth, taking into account the foreign exchange neutral (FXN) impact. This growth projection comes as InvestingPro data shows the company achieved 6.31% revenue growth in the last twelve months. The growth is expected to be driven by the faster-growing Asia-Pacific segment, which may be somewhat balanced by the lower growth in Europe.
The analysts anticipate that Coca-Cola Europacific Partners will experience profit margin expansion due to cost savings, positive operating leverage, and a favorable product mix. They also expect the company to continue returning cash to shareholders, which could contribute to an estimated 11% normalized earnings per share (EPS) compound annual growth rate (CAGR). InvestingPro data reveals the company has raised its dividend for 4 consecutive years, currently offering a 3.51% yield.
While acknowledging the strength in the company's fundamentals, Bernstein's analysts noted that their estimates are broadly in line with the consensus. They also pointed out that Coca-Cola Europacific Partners is currently trading at approximately 15.5 times their next twelve months (NTM) +1 estimates. This valuation is above the historical average, and just slightly below the 16.5 times multiple they believe the stock deserves. According to InvestingPro's Fair Value analysis, the stock appears slightly overvalued at current levels. Subscribers can access additional insights and 12+ more ProTips about CCEP's financial health and growth prospects.
In other recent news, Coca-Cola Europacific Partners has reported a revision in its revenue growth forecast for Fiscal Year 2024 to approximately 3.5%, down from an earlier estimate of around 4%, due to consumer weakness and unfavorable weather conditions. Despite this, the company reaffirmed its profit growth and cash guidance, anticipating comparable operating profit growth of about 7% and comparable free cash flow of approximately €1.7 billion. Bernstein analysts maintained their Market Perform rating on the company's shares, with a steady price target of $82.
Citi has raised the stock target to EUR82, maintaining a Buy rating. Morgan Stanley (NYSE:MS) upgraded Coca-Cola Europacific Partners from Equal-weight to Overweight, raising the price target to $87.00, reflecting increased confidence in the company's 2024 and 2025 outlook. Evercore ISI also updated its outlook on the company, raising the stock's price target from $78.00 to $82.00, maintaining an Outperform rating.
These upgrades come after the company's strong earnings and revenue results, its potential inclusion in the UK's FTSE index from March 2025, and the anticipated resumption of share buybacks. Bernstein analysts anticipate that Coca-Cola Europacific Partners will provide Fiscal Year 2025 guidance during the upcoming results announcement. They also expect an update on capital allocation guidance, noting that the company is projected to return to its stated target leverage range of 2.5x to 3.0x in Fiscal Year 2024.
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