Credit Suisse First Boston upgraded Coca-Cola Enterprises (CCE) to outperform from neutral.
Analyst Andrew Conway says he has increased confidence that Coca-Cola Enterprises will not reduce its earnings per share base in the near term due to soft U.S. volumes, and that a 2% net revenue per case expansion is achievable in the U.S. in 2004. Conway thinks the market's preoccupation with volume sluggishness has created a near-term overhang and an attractive entry point.
As the market becomes comfortable in Coca-Cola Enterprises's margin-based strategy -- and he becomes confident that a disproportionate share of benefits will not flow to Coca Cola -- he thinks the implied profit growth rate could improve from 7.5%, to 8% to 8.5%. Conway sees $1.19 2003 earnings per share, and $1.29 for 2004. He has a $24 target.