UPDATE: Societe Generale Upgrades Coca-Cola Enterprises to Buy on Potential CCE AG Acquisition

In a report published Tuesday, Societe Generale analyst Nicolas Ceron upgraded the rating on Coca-Cola Enterprises

from Hold to Buy, and raised the price target from $37.00 to $42.50. In the report, Ceron noted, “We upgrade CCE from Hold to Buy on a target price raised to $42.5 to capture our increased confidence that CCE will acquire the German Coke bottler CCE AG from The Coca Cola Company (TCCC). We have updated our estimates on a potential acquisition: 1) we now use CCE AG's 2011 published accounts (vs 2010); 2) we assume an acquisition in July 2013; and 3) in an M&A scenario, we would expect CCE to cut its share buyback programme, purchasing shares for only $300m in 2013 vs our current estimate of $1.1bn. This would bring CCE's 2013e net debt/EBITDA ratio to the upper end of the company's medium-term guidance of 2.5-3x. Overall, we believe an acquisition of CCE AG would enhance CCE's EPS by 9% from 2014.” Coca-Cola Enterprises closed on Tuesday at $36.42.