Yahoo Finance Why Coca-Cola HBC AG (LON:CCH) Could Be A Buy
Today we’re going to take a look at the well-established Coca-Cola HBC AG (LSE:CCH). The company’s stock received a lot of attention from a substantial price movement on the LSE over the last few months, increasing to £27.07 at one point, and dropping to the lows of £23.64. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Coca-Cola HBC’s current trading price of £25.99 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Coca-Cola HBC’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. See our latest analysis for Coca-Cola HBC
Is Coca-Cola HBC still cheap?
Coca-Cola HBC appears to be overvalued by 36% at the moment, based on my discounted cash flow valuation. The stock is currently priced at UK£25.99 on the market compared to my intrinsic value of £19.04. This means that the opportunity to buy Coca-Cola HBC at a good price has disappeared! In addition to this, it seems like Coca-Cola HBC’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to fall back down to an attractive buying range, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.
Can we expect growth from Coca-Cola HBC?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. With profit expected to grow by 43.11% over the next couple of years, the future seems bright for Coca-Cola HBC. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? It seems like the market has well and truly priced in CCH’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe CCH should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on CCH for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for CCH, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Coca-Cola HBC. You can find everything you need to know about Coca-Cola HBC in the latest infographic research report. If you are no longer interested in Coca-Cola HBC, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
