Credit Suisse cuts earnings forecasts for Coca-Cola HBC after weak results

18th Feb 2015 11:23

Credit Suisse has lowered its estimates for Coca-Cola HBC (CCH) after annual results from the drinks bottler missed City forecasts on Wednesday, highlighting continued challenges for the group this year.The bank maintained a 'neutral' rating for the stock with a 1,100p target price.The company reported earnings per share (EPS) of 76.1 euro cents for 2014, down 5.6% year-on-year and around 2% below the consensus forecast.Credit Suisse noted that stronger-than-expected volumes in the fourth quarter were unable to offset the margin weakness experienced in emerging markets.As for 2015, the CCH said that volumes are expected to stabilise in the established and developing markets, while emerging markets are predicted to be flat."Whilst the volume outlook is cautiously optimistic, 2015 will be another year of significant currency headwinds, which leads us to cut EPS estimates by 8-9%, now circa 5% below consensus," the bank said.Credit Suisse predicted the foreign exchange (FX) headwinds in 2015 will be bigger than last year, though CCH hopes to offset these through pricing, lower input costs, cost savings, operational leverage from better volumes and a positive country mix."However, the magnitude of the FX headwinds leads us to now expect +10 basis points margin expansion (consensus +30 basis points).The stock was down 4.3% at 1,128p on Wednesday morning.