On Tuesday, Citi reiterated its Buy rating on Coca-Cola (NYSE:KO) Europacific Partners (CCEP:NA) (NASDAQ: CCEP) stock, maintaining a price target of EUR75.00.
The firm anticipates a subdued second quarter for its European operations. It cites unfavorable weather conditions in markets such as Great Britain and France, which have likely affected beverage volumes, particularly in the Away-From-Home (AFH) channel.
Despite these challenges, Citi expects a slight overall increase in first-half volumes, driven by better performance in the Asia-Pacific South (APS) region, specifically the Philippines.
Citi's analysis suggests that Coca-Cola Europacific Partners' management might not alter their full-year 2024 guidance at this time. The firm notes the stock's relatively stable performance and points out that consensus estimates for EBIT growth in 2024 are already exceeding the company's own guidance. Additionally, Citi mentions that a potential London listing for the company is not anticipated before the fourth quarter of this year.
The analyst from Citi has expressed a cautious stance ahead of Coca-Cola Europacific Partners' earnings results, scheduled to be released on Monday. This caution is due to a combination of factors, including the possibility of increased promotional activity in Great Britain later in the year, which might squeeze consumer spending, and the stock trading at high price-to-earnings (PE) ratios relative to historical averages.
The firm also notes that given disappointing second-quarter results from other companies in the beverage sector, the risk/reward balance for Coca-Cola Europacific Partners' stock is tilting towards the downside, despite the company's long-term appeal.
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