Berenberg Boosts Coca-Cola HBC Target Price Amid Africa Acquisition

Analysts at Berenberg have upgraded their target price for Coca-Cola HBC (CCH) to 5,483p from 5,453p, while reiterating a 'buy' rating on the stock. They believe that CCH's acquisition of Coca-Cola Beverages Africa (CCBA) will significantly strengthen the group's long-term growth profile.

The deal is expected to give CCH access to a large and fast-growing consumer base, positioning it among the quickest-expanding operators globally. Berenberg notes that CCBA's core markets offer a significant 'demographic dividend', with working-age populations expected to grow at more than twice the pace of CCH's existing footprint.

In addition, Berenberg highlights a sizeable margin opportunity for CCH, noting that CCBA's FY24 operating margin of 7.4% remains weak relative to peers and its own history. They believe that CCH can unlock meaningful improvement in this area.