Societe Generale Upgrades Coca-Cola Enterprises to “Buy” On Potential Acquisition (CCE)
Due to expectations that Coca-Cola Enterprises Inc (CCE) will acquire German Coke bottler CCE AG, analysts at Societe Generale upgraded the world’s largest beverage bottler and distributor.
The analysts upgraded CCE from “Hold” to “Buy” and see shares reaching $42.50, up from the previous target of $37. This new target suggests a 14% upside to Tuesday’s closing price of $37.39.
Societe Generale analyst Nicolas Ceron noted, “We upgrade CCE from Hold to Buy on a target price raised to $42.5 to capture our increased confidence that CCE will acquire the German Coke bottler CCE AG from The Coca Cola Company (TCCC). We have updated our estimates on a potential acquisition: 1) we now use CCE AG’s 2011 published accounts (vs 2010); 2) we assume an acquisition in July 2013; and 3) in an M&A scenario, we would expect CCE to cut its share buyback programme, purchasing shares for only $300m in 2013 vs our current estimate of $1.1bn. This would bring CCE’s 2013e net debt/EBITDA ratio to the upper end of the company’s medium-term guidance of 2.5-3x. Overall, we believe an acquisition of CCE AG would enhance CCE’s EPS by 9% from 2014.”
Coca-Cola Enterprises were down 37 cents, or -1.00%, during Wednesday morning trading. The stock is up +16.83% year-to-date.
The Bottom Line
Shares of Coca-Cola Enterprises (CCE) have a dividend yield of 2.16% based on Wednesday’s intraday trading price of $37.02 and the company’s annualized dividend payout of 80 cents per share.
Coca-Cola Enterprises Inc (CCE) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
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