Yahoo Finance Is There Now An Opportunity In Coca-Cola HBC AG (LON:CCH)?
Today we're going to take a look at the well-established Coca-Cola HBC AG (LON:CCH). The company's stock saw a significant share price rise of over 20% in the past couple of months on the LSE. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Coca-Cola HBC’s outlook and value based on the most recent financial data to see if the opportunity still exists.
See our latest analysis for Coca-Cola HBC
Is Coca-Cola HBC still cheap?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 19% below my intrinsic value, which means if you buy Coca-Cola HBC today, you’d be paying a fair price for it. And if you believe the company’s true value is £27.75, then there’s not much of an upside to gain from mispricing. What's more, Coca-Cola HBC’s share price may be more stable over time (relative to the market), as indicated by its low beta.
What does the future of Coca-Cola HBC look like?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Coca-Cola HBC's earnings over the next few years are expected to increase by 32%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? It seems like the market has already priced in CCH’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping tabs on CCH, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
If you'd like to know more about Coca-Cola HBC as a business, it's important to be aware of any risks it's facing. Every company has risks, and we've spotted 2 warning signs for Coca-Cola HBC you should know about.
If you are no longer interested in Coca-Cola HBC, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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