Coca-Cola Amatil as withdrawn FY20 guidance. On the one hand the company is benefitting from consumer stockpiling but on the other it is losing sales due to cancelled events, crowdless sport and a general stay-at-home trend. Fortunately, the second half is always better for Coke, given the summer in Australia, but in Indonesia the biggest sales period is Ramadan in the first half, the broker notes.
The shame is Coke had been looking at a long awaited return to earnings growth. Now the situation is unclear. However the broker believes the company’s diversity of channels to market means that overall, it shouldn’t be too badly impacted, especially compared to other companies and industries. Hold retained, target falls to $10.87 from $12.35.
Sector: Food, Beverage & Tobacco.
Target price is $10.87.Current Price is $10.01. Difference: $0.86 – (brackets indicate current price is over target). If CCL meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges – negative figures indicate an expected loss).