Coca-Cola HBC downgraded by Jefferies after recent outperformance

Coca-Cola Hellenic Bottling Co has been downgraded by analysts at Jefferies, with the investment banking firm reducing its rating to ‘hold’ from ‘buy’.

According to Jefferies, the UK-listed bottling arm of Coca-Cola is now adequately valued after its share price has risen 58% since last September.

There have been reports that the company is weighing up an offer for a stake in Coca-Cola Beverages Africa, and Jefferies believes that would be beneficial for its stock market performance.

However, it rates the likelihood of such a deal going ahead at 50%.

While analysts continue to see an attractive recovery story, they downgraded their rating to limited visibility on M&A.

The standalone value for CCH was calculated at 2,450p, however, a target price of 2,700p reflects a 50% probability weighting of the CCBA deal taking place, Jefferies said.

Analysts added that the TP could be as low as 2450p if there is no deal, while it could be as high as 3000p if the acquisition does go through.

Jefferies said CCH could announce a special dividend of between £1.50 and £2.00 per share, depending on the outcome of the deal.