Coca-Cola Could Remain Range-Bound For 2017; Credit Suisse Initiates At Neutral

Credit Suisse’s Laurent Grandet expects The Coca-Cola Co KO shares to remain range-bound over the next 12 months as the company implements operational and organizational changes already underway.

Grandet initiated coverage of the company with a Neutral rating and price target of $44.

Most Valuable Brand

“Coke is one of the top three most valuable brands in the world and one of the best operators out there,” the analyst mentioned, while adding that “earnings over the coming year or two will be bumpy owing to the timing of refranchising.”

Related Link: Put A Pep In Your Step With Pepsi: Credit Suisse Initiates At Outperform

Grandet believes Coca-Cola’s global footprint, scale and its best-in-class operational execution throughout its bottling system are “clear competitive advantages” for the company.

“In addition, Coke's dominance in the on-premise channel will continue to provide an advantage in building brand preference and consumer experience,” the analyst stated.

Catalysts Factored In

Grandet believes the catalysts that could revitalize the company, including the refranchising, improved alignment with bottling partners and the Monster Beverage Corporation MNST deal, are already factored into the share price.

“We think the company is making the right moves and will do better what it does best. However, we question whether it’s enough to move the needle over the coming couple years when KO's core Carbonated Soft Drink business is declining in the U.S and slowing down internationally,” Grandet went on to say.

Full ratings data available on Benzinga Pro.