Coca-Cola Europacific Partners assumed with a Buy at UBS

UBS analyst Sanjeet Aujla assumed coverage of Coca-Cola Europacific Partners with a Buy rating and $69.40 price target. The analyst assumed coverage of European beverages with a negative view on the near-term. The firm is negative on near-term fundamentals, saying volume declines are likely to persist into Q1 of 2024, pricing is moderating, and management teams are likely to guide cautiously on fiscal 2024 and not endorse consensus margin expectations. However, with the sector de-rating to a 36% valuation premium to the market, versus 60% in mid-2022 and 40% historically, many of these issues are priced in, the analyst tells investors in a research note. Looking into 2024, UBS thinks a return to volume growth and falling yields could support a sector re-rating, “disproportionately so for companies delivering quality growth.” It has Buy ratings on Heineken, Campari, Coca-Cola Europacific Partners and Coca-Cola HBC, a Sell rating on Diageo and Carlsberg, and Neutrals in AB InBev, Pernod and Remy.