Coca-Cola HBC AG CCH

Transferring Coverage of Coca-Cola Europacific Partners and Coca-Cola HBC; Shares Overvalued

We are transferring coverage of two of The Coca-Cola Company's largest bottlers Coca-Cola Europacific Partners and Coca-Cola HBC. For CCEP, we are raising our fair value estimate to EUR 60 from EUR 56 and for CCHBC, we are lowering our fair value estimate to GBX 2,440 from GBX 2,800. Our current valuations place shares in 2-star territory for both firms as we think the market is overly optimistic on medium-term growth prospects. We maintain our narrow moat rating, Standard Morningstar Capital Allocation Rating, and Medium Morningstar Uncertainty Rating for both firms.