Archived article
Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
magazineCoca-Cola HBC should fizz higher on reopening
COCA-COLA HBC (CCH) 25.09
Gain to date: 7.3%
Original entry point: Buy at £23.38, 17 December 2020
OUR ‘buy’ call on soft drinks colossus Coca-Cola HBC (CCH) has marginally underperformed the wider market year-to-date despite achieving solid gains but we are confident there is more upside to come as earnings fizz higher with the reopening of the global economy.
We are encouraged by a first quarter trading update (12 May) from the soft drinks bottler, a strategic partner of The Coca-Cola Company with access to strong brands, leading market shares and a geographically diversified distribution footprint.
Despite Covid-19 related restrictions continuing to impact the important out-of-home channel, Coca-Cola HBC reported a good start to the year with 6.1% like-for-like sales growth led by the sparkling and energy categories and ‘strong execution’ in the at-home channel.
Lockdowns in Europe continued to stir up headwinds, yet Coca-Cola HBC’s geographic diversity enabled it to benefit from accelerating sales in emerging markets, with both Russia and Nigeria seeing double-digit volume growth in the quarter.
CEO Zoran Bogdanovic insists strong customer relationships mean it is well placed to capitalise on the reopening of the out-of-home channel.
‘The speed and shape of recovery from the pandemic remains uncertain,’ explained Bogdanovic, ‘but Q1 puts us on track to achieve our 2021 guidance.’
SHARES SAYS: Keep buying Coca-Cola HBC.
Important information:
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
Issue contents
Case study
Feature
Great Ideas
- Hill & Smith set to cash in on US infrastructure boom
- Improving backdrop for still cheap TT Electronics
- Buy Shield Therapeutics as it stands on cusp of US breakthrough
- Bank a tidy profit on UDG as private equity swoops
- Investors toast Diageo’s £4.5 billion capital return
- Coca-Cola HBC should fizz higher on reopening
