Market Overview

Deutsche Makes A Resolution To Hold Coca-Cola, Procter & Gamble In The New Year

Deutsche Makes A Resolution To Hold Coca-Cola, Procter & Gamble In The New Year

Deutsche Bank’s Bill Schmitz believes, despite recent underperformance, group valuation suggests the beverage segment is nearing fair intrinsic value.

Approaching Fair Value

The analyst expects rate hikes in 2017, a strong dollar and an improving U.S. macro environment, all of which are likely to drive negative staples funds flows.

Schmitz upgraded the rating on The Coca-Cola Co (NYSE: KO) and Procter & Gamble Co (NYSE: PG) from Hold to Buy, while lowering the price target for the former company from $48 to $44 and for the latter from $95 to $90.

The analyst believes Coca-Cola CEO James Quincey is the right person to bring about a turnaround, although “investor migration out of staples, clear EM and health and wellness related consumption headwinds and likely negative earnings revisions should inhibit near-term outperformance.”


Schmitz also expressed comfort with the medium- to long-term opportunity for Procter & Gamble, although near-term catalysts are likely to be absent for the next few quarters.

Despite the broad pressure of the beverage segment, the analyst believes the evolving macro factors, which are crucial for earnings momentum, would drive share price performance.

“With the strong dollar, f/x should again clip expected outsized earnings growth at the multinationals which should help the more commodity exposed, domestic names unless we are entering an anomalous period of a strong dollar and rising commodities,” the analyst went on to say.

The EPS estimate for 2017 for Coca-Cola has been lowered from $1.95 to $1.90, while the EPS estimate for Procter & Gamble is in line with the consensus at $3.87.

At Last Check

Latest Ratings for KO

Oct 2020UBSMaintainsBuy
Oct 2020Morgan StanleyMaintainsOverweight
Jul 2020Morgan StanleyUpgradesEqual-WeightOverweight

View More Analyst Ratings for KO
View the Latest Analyst Ratings


Related Articles (KO + PG)

View Comments and Join the Discussion!

Posted-In: Analyst Color Long Ideas News Upgrades Price Target Analyst Ratings Movers Trading Ideas Best of Benzinga

Latest Ratings

INTCJP MorganMaintains70.0
STMCanaccord GenuityMaintains47.0
ELDeutsche BankMaintains248.0
UAADeutsche BankMaintains13.0
INTCDeutsche BankMaintains55.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at