Does Coca Cola have more upside potential than Diageo plc, PZ Cussons plc and ASOS plc after full year results?

Could Coca Cola HBC AG (LON:CCH) (CCH.L) outperform Diageo plc (LON:DGE) (DGE.L), PZ Cussons plc (LON:PZC) (PZC.L) and ASOS plc (LON:ASC) (ASC.L)?

Coca Cola
Coca Cola

The Coca Cola HBC AG (LON:CCH) (CCH.L) share price has gained 3% today after it released full year results for 2017. They show a further year of progress towards the company’s 2020 strategic objectives.

During the period, there was a balance of volume and price/mix growth. Together they helped to drive net sales revenue up by 5.9% on a constant currency basis. Revenue per case increased across all of the company’s segments when compared to 2016 figures. This was driven by price increases taken in the Emerging segment, as well as stronger package and category mix across the business.

Coca Cola’s volume increased by 2.2%, with growth across all of its segments. There has been strong momentum in Emerging and Developing segment countries. However, challenging environments in Russia and Nigeria have meant that they delivered slightly lower volumes.

The company has been able to carefully manage input costs, while an increase in marketing spend of 10 basis points as a percentage of revenue could boost the long term potential of the business in my view.

In the last 3 months the Coca Cola share price has fallen 6%. That’s a worse performance than other consumer goods stocks such as Diageo plc (LON:DGE) (DGE.L), PZ Cussons plc (LON:PZC) (PZC.L) and ASOS plc (LON:ASC) (ASC.L). Diageo is down 4%, ASOS is up 22% and the PZ Cussons share price has dropped 5% during the same time period.

In my view, Coca Cola has a sound strategy and is making good progress. I believe it has the capacity to continue to drive sales and profit higher over the next few years, with the company forecast to post a double digit rise in EPS in the next two years.

Sure, its share price performance may have disappointed in recent months. However, today’s results could help to improve investor sentiment. With a PEG of 1.4, I believe it offers good value for money for the long term.








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Robert Stephens is a CFA Charterholder and an Equity Analyst by trade. He is a passionate private investor who has been buying and selling shares for many years, owning a wide range of UK shares in the process. He has written for Citywire and The Motley Fool US and now runs his own business. To contact Robert, please email info@investomania.co.uk or use one of the other contact methods available on the 'Contact Us' page