Investing.com -- Bank of America (BofA) has downgraded Coca-Cola European Partners (LON:CCEPC) (NASDAQ:CCEP) to Neutral, arguing that muted top-line growth is limiting valuation upside despite solid earnings momentum.
It also lowered its price objective to $96 from $102.
The bank cut its rating as part of its Beverages Year Ahead review, saying the consumer environment in Europe remains challenging and is likely to keep sales growth below the company’s mid-term target for a third consecutive year.
BofA now expects 2026 FX-neutral sales growth of 2.6% for the world’s largest independent Coca-Cola bottler, below both the company’s mid-term guidance of circa +4% and consensus expectations.
Analyst Andrea Pistacchi said this softer top-line outlook could make it “slightly more difficult” to deliver operating profit growth of around 7% in 2026, even as cost savings, operating leverage and cash generation continue to support earnings.
On the other hand, strong cash conversion and share buybacks should underpin around 8% EPS growth in 2026, he noted, with medium-term EPS growth of 10–11% seen as among the most attractive in the staples sector.
But the downgrade is largely valuation-driven. Pistacchi said that at around 16.5x 12-month forward price-to-earnings (P/E), the stock trades at a small premium to European staples, which it views as fair given the current top-line trajectory.
“We view the stock as fairly valued, with limited scope for multiple expansion given the current top-line trajectory,” the analyst said.
Regionally, Pistacchi flagged ongoing affordability pressures in Europe, which accounts for roughly three-quarters of group sales, as a key constraint on volume growth. He forecasts only a modest improvement in European volumes in 2026, supported by less pricing and incremental volume recovery.
In Asia Pacific, the exit from the Suntory alcohol distribution contract in Australia and New Zealand is expected to be a near-term headwind, while the pace of recovery in Indonesia remains uncertain, though BofA remains cautiously optimistic about that region given its "significant potential."


















