Coca-Cola Europacific Partners and Coca-Cola HBC: Strong Executors but Value Lies Elsewhere

We are initiating coverage of two of The Coca-Cola Company's largest bottlers Coca-Cola Europacific Partners, or CCEP, and Coca-Cola HBC, or CCHBC, with fair value estimates of EUR 54 and GBP 26 per share, respectively. Both firms have strong business models, and we award them narrow moat ratings, but we do not believe that current market valuations provide an appropriate risk/reward opportunity. At present, we see more value in Latin American bottler Coca-Cola Femsa, or CCF, a wide moat firm with 10% upside to our fair value estimate as of Dec. 4. We would own CCEP and CCHBC at the right price, but we recommend waiting for a more attractive entry point.