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Stock Analyst Note

Narrow-moat bottler Coca Cola HBC posted a solid first-quarter trading update with volumes up 2% and organic revenue up 13%, led by strong performance in the emerging and developing markets (67% of total sales) despite geopolitical and macro headwinds in Eastern Europe and Africa. We see management’s 2024 outlook for organic sales and operating profit growth both in the midsingle digits as achievable, and we are maintaining our projections for a mid-single-digit sales CAGR and an 11% average operating margin over the five-year horizon. Our GBX 2,800 fair value estimate is intact. The share price has gained 10% since April, when we called out the valuation discount relative to close peer, narrow-moat CCEP, but we think the stock remains slightly undervalued.
Stock Analyst Note

Europe-based Coca-Cola Europacific Partners, or CCEP, and Coca-Cola Hellenic Bottling Company, or CCHBC, rank as the second- and third-largest Coke bottlers globally by volume, and both earn a narrow economic moat rating based on strong route-to-market operations in their authorized territories. We don't foresee material differences in the two bottlers' top-line growth—both are at 4% annually excluding acquisitions—and cash conversion—free cash flows to the firm averaging 6% and 7% of sales, respectively—over the next five years. However, the CCEP stock currently trades at a 12% premium to our EUR 56 fair value estimate, while CCHBC trades at a 15% discount to our GBX 2800-per-share intrinsic valuation. We think the market is underestimating CCHBC's growth and earnings power, and we consequently view CCHBC's shares as attractive.
Company Report

Coca-Cola Hellenic Bottling Company, or CCHBC, the third-largest bottler by volume in the Coca-Cola system, is one of the more diversified bottlers by both geographic footprint and product portfolio. Through its legacy assets and acquisition, CCHBC has operations in Eastern Europe, some of the smaller markets in Western Europe such as Switzerland and Ireland, and Egypt and Nigeria in Africa. Developing and emerging markets combined accounted for 68% of revenue in 2023 and 65% of EBIT.
Company Report

Coca-Cola Hellenic Bottling Co., the third-largest bottler by volume in the Coca-Cola system, is one of the more diversified bottlers by both geographic footprint and product portfolio. Through its legacy assets and acquisition, CCHBC has operations in Eastern Europe, some of the smaller markets in Western Europe such as Switzerland and Ireland, and Egypt and Nigeria in Africa. Developing and emerging markets combined accounted for 68% of revenue in 2023 and 65% of EBIT.
Stock Analyst Note

In the context of fairly mixed results among consumer product manufacturers in the fourth quarter, Coca-Cola HBC, or CCHBC, reported a reasonably strong performance. Revenue and operating profit were both within a whisker of our estimates, and guidance for 2024 is in line with our assumptions. We retain our GBP 26 fair value estimate and our narrow moat rating. The market's positive reaction to the report, most likely relief that guidance is in line with previously disclosed medium-term growth guidance, means that the stock was trading within 10% of our fair value estimate at the close of trading on Feb. 14. However, after recent upward movements in the market values of the group, CCHBC now represents one of the only equities under our coverage offering direct exposure to the Coca-Cola system with valuation upside.
Company Report

Coca-Cola Hellenic Bottling Company, or CCHBC, the third-largest bottler by volume in the Coca-Cola system, is one of the more diversified bottlers by both geographic footprint and product portfolio. Through its legacy assets and acquisition, CCHBC has operations in Eastern Europe, some of the smaller markets in Western Europe such as Switzerland and Ireland, and Egypt and Nigeria in Africa. Developing and emerging markets combined accounted for 68% of revenue in the first half of 2023 and 69% of EBIT.
Stock Analyst Note

We are initiating coverage of two of The Coca-Cola Company's largest bottlers Coca-Cola Europacific Partners, or CCEP, and Coca-Cola HBC, or CCHBC, with fair value estimates of EUR 54 and GBP 26 per share, respectively. Both firms have strong business models, and we award them narrow moat ratings, but we do not believe that current market valuations provide an appropriate risk/reward opportunity. At present, we see more value in Latin American bottler Coca-Cola Femsa, or CCF, a wide moat firm with 10% upside to our fair value estimate as of Dec. 4. We would own CCEP and CCHBC at the right price, but we recommend waiting for a more attractive entry point.
Company Report

Coca-Cola Hellenic Bottling Company, or CCHBC, the third-largest bottler by volume in the Coca-Cola system, is one of the more diversified bottlers by both geographic footprint and product portfolio. Through its legacy assets and acquisition, CCHBC has operations in Eastern Europe, some of the smaller markets in Western Europe such as Switzerland and Ireland, and Egypt and Nigeria in Africa. Developing and emerging markets combined accounted for 68% of revenue in the first half of 2023 and 69% of EBIT.

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