Citi expects upgrades at Coca-Cola HBC, but stays at 'neutral'

dl coca cola hbc ag cch consumer staples food beverage and tobacco beverages soft drinks ftse 100 premium coca cola hellenic bottling company 20230327 2121 — Coca-Cola HBCSharecast graphic / Josh White

Coca-Cola HBC AG (CDI)

2,746.00p

17:15 04/11/24

-0.29%

-8.00p

Citi has reiterated a 'neutral' rating on Coca-Cola HBC, predicting that the stock will "pause for breath" ahead of its first-half results next month.

The bank said it expects the soft drinks bottling firm to meet consensus forecasts with second-quarter volumes, with organic sales predicted to grow by 9.4% when it reports its interim results on 7 August.

Meanwhile, a "solid first-half profit delivery" should allow the company to upgrade its full-year organic growth metrics and guidance for organic EBIT growth to the 9-12% range, up from the 3-9% range guided to in April.

"However, given: 1) the recent solid share price performance; 2) greater opportunity for Q3 earnings upgrades at other European beverage stocks, e.g. CCEP, Heineken; 3) share buyback support now absent ahead of the print; and 4) the stock trading on a full but fair ex: Russia PE of 18.0x, we expect the shares to pause for breath," said analyst Simon Hales.

The shares were up 1% at 2,708p by 1108 BST, having risen 17% over the year to date.