Coca-Cola Enterprises ($CCE) will be reporting its fourth quarter financial results before the bell Thursday morning. (2/11). Investors and analysts have communicated concerns in relation to the economic development in Europe and if the increased competitive environment will continue to affect revenue. Unfavorable currency translation is another factor that could affect Coca-Cola’s revenue. The depreciation of the Euro against the Dollar is expected to have caused major headwinds in 2015, causing a drag on sales. On another note, Coca-Cola ($CCE) has a strong history of beating earnings estimates and delivered a positive surprise 3.7% last quarter. Wall Street is anticipating Coca-Cola ($CCE) to announce earnings of 51 cents per share and revenue of $ 1.64 billion for the quarter.
The SprinkleBit Analyzer is a great tool you get access to through SprinkleBit’s premium subscription. By populating the analyzer with Coca-Cola’s main competitors in the soft and bottled drinks industry, we can project how its financial fundamentals compare to its peers. For this analysis, we used EBITDA Multiple, Revenue Multiple and PE to compare Coca-Cola ($CCE) against Dr Pepper Snapple Group ($DPS), Pepsi CO ($PEP), National Beverage Corp ($FIZZ), and Monster Beverage ($MNST) By running the fundamental measures in comparison to these companies we received an implied share price of $ 59.93. With the current trading price of $ 47.83 (2/11 @ 12:00 pm) Coca-Cola ($CCE) is undervalued with 25.30%.
In order to see where the stock price potentially could move to, we have analyzed the technicals as well. With an entry price of $47.83 and a reported loss on earnings, the stock has the potential to fall to $ 45, for a 5,92% loss. With an entry price of $47.83 and a reported beat on earnings, the stock has the potential to rise to $51.60, for a 7.88% gain. The risk/reward ratio for this trade is 1.33.
Continue the discussion!