Coca-Cola Europacific Partners: Strong EPS Growth but Slowing Sales and Full Valuation Justify Neutral (Hold) Rating

In a report released today, Andrea Pistacchi from Bank of America Securities downgraded Coca-Cola Europacific Partners to a Hold, with a price target of $96.00.

Andrea Pistacchi has given his Hold rating due to a combination of factors that balance solid earnings growth with constrained revenue momentum and a fairly full valuation. He expects Coca-Cola Europacific Partners to continue delivering robust EPS expansion, supported by strong cash generation and increased share buybacks, making its earnings growth profile one of the more attractive within the consumer staples sector. However, he anticipates that 2026 sales growth will again fall short of the company’s mid-term guidance, reflecting persistent consumer affordability challenges in Europe, moderating energy drink growth after an exceptional year, and headwinds from the termination of a key distribution contract in Australia and New Zealand. While he sees promising longer‑term potential in Indonesia, including meaningful volume growth from 2026 onward, this contribution is expected to build only gradually and will not immediately close the gap to the company’s targeted sales growth trajectory.
At the current share price, Pistacchi judges the stock to be trading around 16.5 times forward earnings, roughly in line with the broader European staples sector and now lacking the valuation discount or clear catalyst needed to justify a more positive view. Given this multiple and his more cautious stance on top-line growth, he sees limited room for valuation multiple expansion despite the strong earnings outlook. Consequently, he has reduced his price objective in line with a sector-average earnings multiple, rather than the prior premium he had assigned when revenue prospects appeared stronger. This combination of healthy EPS growth, muted sales momentum, and a valuation he considers fair leads him to a Neutral (Hold) stance rather than a Buy.