We are revising our forecasts to reflect a more challenging short-term environment, while also incorporating Coca-Cola Beverages Africa (CCBA) from 2027 onwards, according to a Eurobank Equities analysis on Coca-Cola HBC, which raises the target price to €59.50 from €46 previously and revises the rating to“buy”from “hold.”
For 2026, we are making marginal adjustments, the brokerage explains, taking into account a slightly more challenging environment, but we continue to expect another year of strong growth (+8.5% organic EBIT), supported by pricing discipline, resilient brand strength, and continued momentum in emerging markets.
From 2027, the integration of CCBA substantially expands Coca-Cola HBC ’s (CCH), increasing the group’s exposure to structurally faster-growing African markets and strengthening the long-term revenue growth profile, albeit with some initial pressure on margins due to integration and execution costs.
Management has guided for organic revenue growth of 6-7% and organic EBIT growth of 7-10% for 2026, and we estimate that the lower end of these forecasts remains well within reach, despite a less favorable external environment. Geopolitical tensions and renewed inflationary pressures have increased uncertainty surrounding demand, supply chains, and input costs.
However, CCH entered the year with strong commercial momentum, significant commodity hedging, and proven pricing flexibility.
We believe, he continues, that the agreed acquisition of CCBA is strategically highly attractive, transforming CCH into the second-largest bottler in the Coke system in terms of volume and adding key African markets with attractive demographics and category growth prospects.
According to our estimates, CCBA will add approximately 20% to the group’s EBIT. South Africa provides the core, strongly cash-generating base, while East Africa offers longer-term growth opportunities.
Undoubtedly, the acquired footprint entails increased currency, regulatory, and operational risk; however, CCH’s distribution capabilities, revenue growth management, and operational discipline are expected to support margin improvement over time.
Even after the integration of CCBA, CCH’s balance sheet will remain strong, with leverage temporarily rising to the lower end of the 1.5–2x range. After 2027e, strong cash flow generation is expected to support rapid deleveraging, aided by the group’s expanded earnings base and cash flow conversion. This will allow CCH to maintain both financial flexibility and its dividend profile (a 41% payout ratio is embedded in our estimates, with a 13% CAGR in earnings per share dividends projected for the 2027–30 period).
Our updated DCF valuation leads to a target price of €59.5 (>20% upside potential including CCBA), supporting an upgrade to“Buy,”as we believe the current valuation reflects only part of the expanded group’s medium-term earnings potential.
However, we expect the revaluation to be gradual rather than linear, with geopolitical “noise” and volatility in input costs creating entry points from time to time.
Overall, we believe the risk/return profile is becoming increasingly attractive, with valuation support now bolstered by the expanded footprint, higher structural growth, and significant cash flow flexibility from the expanded platform.