Berenberg Lifts Target Price for Coca-Cola HBC on Africa Acquisition

Analysts at Berenberg have increased their target price for Coca-Cola HBC to 5,483p from 5,453p, while reiterating a 'buy' rating. The broker believes that the upcoming acquisition of Coca-Cola Beverages Africa will significantly boost the company's long-term growth prospects.

The deal is expected to provide CCH with access to a large and fast-growing consumer base, allowing it to position itself as one of the quickest-expanding operators globally. Berenberg highlights the 'demographic dividend' in CCBA's core markets, where working-age populations are expected to grow at more than twice the pace of CCH's existing footprint.

The broker also notes that CCBA's FY24 operating margin remains weak relative to peers and its own history, partly due to inflation and EM currency pressure. However, Berenberg believes that CCH can unlock meaningful improvement through operational focus.