Coca-Cola Hellenic a Buy - Analyst Blog
Coca-Cola Hellenic Bottling Company (CCH) enjoys an attractive geographic mix with 66% of revenues being derived from developing or emerging markets. In addition, the company's product mix is less dependent on CSDs (carbonated soft drinks) than other bottlers.
Since the company conducts business and reports financial results in Euros, much of the stock's performance is inversely correlated with US dollar's exchange rate with the Euro. However, as management has a sound business strategy and proven execution skills, the recent earnings decline is providing a valuation-based buying opportunity.
Therefore, the stock is rated a Buy. When the US dollar was weakening versus the Euro and the company's EPS growth was accelerating, the P/E multiple expanded to 29. However, with the recent quarterly earnings decline and the strength of the US dollar, the P/E contracted as earnings momentum investors fled from the stock.
Nonetheless, the target price is based on a 14.5 P/E on trailing 12 month earnings, or $28.00 per share.
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