UPDATE: Bank of America Merrill Lynch Initiates Coverage On Coca-Cola HBC With Underperform on Uncertain Margin Recovery

In a report published on Monday, Bank of America Merrill Lynch analyst Henry Davies initiated coverage on

with a Rating of Underperform and a price target of $21.60. In the report, Bank of America Merrill Lynch stated, "While CCH's recent investor day highlighted a number of LT positives (p15), we believe estimates & valuation are discounting an optimistically fast recovery in EBIT margins, which have dropped 350bps since 2010 on macro & input pressures. Our FY13-15 EPS estimates are 4%, 8% & 13% below consensus, and CCH's current 24x fwd PE compares to a 12-18x range & 14x 10yr avg. Near-term, we expect trading to remain challenging, with Europe accounting for 91% of sales." Coca-Cola HBC closed on Friday at $26.12.