Coca-Cola HBC rallies on Citigroup upgrade

20th May 2016 12:25

(ShareCast News) - Beverage bottler Coca-Cola HBC shares jumped on Friday after Citigroup upgraded the stock to 'buy'.Analysts at Citigroup said the company's shares trade at a five-year peak discount to peers.While they acknowledged concerns - including a potential naira devaluation and rising sugar prices -the analysts felt "these concerns are priced in, providing a good opportunity to buy into improving fundamentals".Citigroup expects a visible margin recovery opportunity to be a key driver of share performance.The broker predicts margins will be subdued this year before accelerating in 2017-18 by 40 basis points, driven by further cost savings and enough price/mix to offset input cost headwinds."This should result in a compelling 9% earnings before interest and tax growth," Citigroup said.Shares rose 5.21% to 1,353p at 1245 BST.