Coca-Cola Hellenic Bottling Company AG (HBC) (LON:CCH) has been upgraded to ‘Buy’ from ‘Hold’ by US-based broker Jefferies as the drinks bottler entered what analysts described as “a sweet spot of growth”.
Analysts said the FTSE 100 firm was “poised to benefit from continued strong top and bottom line momentum”, with its key Russian and Nigerian markets expected to return to growth from the second quarter onwards, adding that they had “detected increased focus on growth initiatives from newish [chief executive] Zoran Bogdanovic. This includes focus on product/channel mix, innovation and quicker decision making”.
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They added that HBC was also “attractively positioned to take advantage of acquisition opportunities, including transformational deals in Africa”, while also expecting the company to return capital to shareholders through special dividends even if a transformational deal did not materialise.
The broker also upped its target price to 3,000p from 2,660p, although analysts commented that if a deal did take place (on which they placed a 50% weighted probability) there could be a potential upside of as much as 23%, bringing the shares to 3,200p.
Jefferies also highlighted that as a UK-listed company with no earnings in sterling, HBC was also “attractively positioned” for any potential weaknesses in the pound caused by Brexit concerns.
In mid-morning trading Wednesday, Coca-Cola HBC shares were up 0.7% at 2,697p.