CCEP - Coca-Cola Europacific Partners upgraded to 'Buy' at UBS

Despite concerns on European consumers heading into the close of 2022, UBS sees more upside than downside for Coca-Cola Europacific Partners ( NASDAQ: CCEP ).

Per the bank’s analysis, the brand should be less sensitive to economic slowdowns on the continent and trade-down effects, while top-line growth appears attractive. Additionally, the bank surmised that much of the downside risk posed by cost increases is now priced in.

“The COGS outlook for 2023 has been improving (the situation with gas in Germany, which is factored into our downside case) and cost pressures should not be as material as for European brewers,” the analysis noted.

The note added that free cash flow improvements and a low exposure to emerging markets only add to bullish factors for the name. At the very least, UBS noted these dynamics “make [them] more relaxed” about the company’s ability to reduce leverage and drive growth. As such, the team of analysts upgraded shares from “Neutral” to “Buy”, raising their target price from $62 to $68.

Shares rose 1.09% on Wednesday.

Read more on why Deutsche Bank touted the stock as a top pick in March .

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