Back to top

Analyst Blog

Coca-Cola Enterprises (CCE - Analyst Report), the Western European bottler of The Coca-Cola Company (KO - Analyst Report), reaffirmed its financial guidance for 2014 at the Deutsche Bank Global Consumer Conference in Paris.

In 2014, adjusted earnings are expected to increase approximately 10% in constant currency terms. In addition, according to recent rates, currency is expected to benefit 2014 earnings per share by approximately 5%.

While adjusted constant currency net sales are expected to grow in the low single-digit range, operating income is expected to grow in the mid single-digit range. Operating income growth is expected to be weighted toward the second half of the year.

Management’s 2014 revenue and operating income outlooks are below the long-term targets of 4–6% and 6–8%, respectively, anticipating continued operating/marketplace challenges.

Coca-Cola Enterprises is geographically focused on Western Europe and is thus exposed to the economic uncertainties of this region, including debt burdens of some of these countries and the challenging consumer spending environment. The company has been facing several operating and marketplace challenges, such as steep price competition in Great Britain, overall soft macroeconomic conditions and difficult beverage market conditions in France due to the increase in French excise tax.

Though the earnings per share guidance of approximately 10% growth is above the long-term target of high single-digit range growth, it will be mostly driven by share buybacks.

Coca-Cola Enterprises expects free cash flow for full-year 2014 to be $650 million. Capital expenditures are still expected to be approximately $350 million. The company expects the weighted average cost of debt to be around 3%. Effective tax rate is expected within 26% to 28%.

Other Stocks to Consider

Coca-Cola Enterprises carries a Zacks Rank #3 (Hold). Better-ranked beverage stocks include The WhiteWave Foods Company (WWAV - Snapshot Report) and Dr Pepper Snapple Group, Inc. (DPS - Analyst Report). Both the companies carry a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%