Credit Suisse bumps up target price for CCH

The bottling company outlined plans for revenues to grow by between 4% to 5% over fiscal year 2016 to 2020 and boost its margins from the 7.5% achieved in 2015 back to their levels from before the crisis, at 11%.

Analysts Sanjeet Aujla, Charlie Mills and Pavan Daswan estimated the improvement in margins would be more backend-loaded, towards 2018-2020, reaching 10% by fiscal year 2020. The analysts also called attention to the "inherent volatility" of the company´s markets.

If CCH met those targets then on the basis of current exchange rates that could translate into a compound annual growth rate of 15% in earnings per share between 2016 and 2020, they said.

That led Credit Suisse to lift its target price on the company´s shares from 1,480p to 1,500p, while keeping its recommendation at 'neutral'.

The Swiss broker also pointed out the prospect for better pricing in Russia, easing deflation across Europe and the "good work" carried out by management on its cost base, which should allow for greater operational leverage if momentum on the top line was maintained.

Lastly, the analysts noted how in the absence of future M&A opportunities the company would 'optimise' its balance sheet by paying out a special dividend.