Coca-Cola HBC share price reaction 'overdone', says Deutsche Bank

21st May 2019 15:54

(Sharecast News) - Analysts at Deutsche Bank believe that Monday's drop in bottling company Coca-Cola HBC's shares in reaction to the news that The Coca-Cola Company would keep its majority stake in Coca-Cola Beverages Africa "for the foreseeable future" was overdone.The Coca-Cola company revealed on Monday that, having had discussions with several potential partners for CCBA, it intends to retain its majority stake in the bottler for the foreseeable future.The German broker reckons the share price reaction to the news, with CCH ending the day as the biggest faller on the FTSE 250 on Monday, was overdone.Deutsche believes that given the attractions of the standalone investment case, and the fact that a CCBA deal "seemed unlikely" on a six-to-twelve month view anyway and that it also didn't rule out The Coca-Cola Company refranchising CCBA at some point in the future, the shares overreacted on the news."We believe the shares have overreacted on the news, with possibly some short term 'event-money' coming out of the stock, and we would take this as a buying opportunity," said Deutsche.Deutsche stood by its 'buy' rating and 3,200p target price for CCH.