27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
In conjunction with a beverage industry update, Goldman Sachs recommended another pair trade in the space this week in addition to its downgrade of PepsiCo, Inc. (NASDAQ:PEP) and simultaneous upgrade of The Coca-Cola Co (NYSE:KO).
The Analyst
Judy Hong upgraded shares of Coca-Cola European Partners PLC (NYSE:CCE) from Neutral to Buy and reduced the price target from $50 to $48.
The analyst downgraded shares of Molson Coors Brewing Co Class B (NYSE:TAP) from Buy to Neutral and lowered the price target from $104 to $83.
Coca-Cola European Partners: Healthy Top And Bottom Line
With a U.K. soda tax having taken effect this month, investors have a compelling opportunity to benefit from Coca-Cola European Partners' re-emerging capital allocation potential, Hong said in a note.
Goldman Sachs forecast all-in sales growth excluding forex of 5-percent-plus in 2018, helped by pricing and portfolio initiatives.
Synergies from the combination of three Coke bottling companies in 2016 continue to flow to the bottom line, the analyst said.
An underappreciated catalyst for CCE is the likelihood of the company transitioning Coca-Cola Beverages Africa to an independent bottler. If it happens, Hong projects potential accretion ranging from zero to 5 percent to Goldman's 2019 EPS estimate.
Weak Volume Expected To Depress Molson Coors Valuation
Goldman expects weak volumes for Molson Coors that will likely drive consensus estimates lower and keep valuations depressed, Hong said.
"We now see downside risk to volume and, with further estimate cuts, cost savings alone are unlikely to be enough to drive improved investor sentiment."
Goldman does not anticipate any material near-term catalysts that could drive a re-rating.
The firm lowered its Molson Coors estimates for 2018, 2019 and 2020 by 1-4 percent, leaving the estimates 1-5 percent below the consensus.
The Price Action
Coca-Cola European Partners shares have added 4.2 percent year-to-date, while Molson Coors shares have shed about 10 percent.
Related Links:
The Trend Isn't Your Friend; Sell Molson Coors
Trump's Tariff Decision Could Make Your Beer More Expensive: Here's How
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
ENTER TO WIN $500 IN STOCK OR CRYPTO
Enter your email and you'll also get Benzinga's ultimate morning update AND a free $30 gift card and more!