COCA-COLA EUROPACIFIC PARTNERS plc (NASDAQ: CCEP)

Sector: Consumer Defensive Industry: Beverages - Non-Alcoholic CIK: 0001650107
Market Cap 48.53 Bn
P/B 5.27
P/E 20.84
P/S 1.97
ROIC (Qtr) 0.00
Div Yield % 2.23
Rev 1y % (Qtr) 0.00
Total Debt (Qtr) 12.58 Bn
Debt/Equity (Qtr) 1.36
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About

Coca-Cola Europacific Partners plc (CCEP), commonly known as CCEP, is a prominent player in the beverage industry, specifically in Europe. The company's primary business activities involve the production, packaging, and distribution of a wide array of beverages, including soft drinks, water, and juice. CCEP's operations span across Europe, and it generates revenue through a diverse customer base that includes retailers, wholesalers, and foodservice providers. The company's product portfolio is extensive, featuring popular brands such as Coca-Cola,...

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Investment thesis

Bull case

  • Operating cash flow of 3.47B provides exceptional 79.81x coverage of minority interest expenses 43.53M, showing strong core operations.
  • Operating cash flow of 3.47B provides strong 62.83x coverage of stock compensation 55.29M, indicating sustainable incentive practices.
  • Robust free cash flow of 2.55B exceeds capital expenditure of 920M by 2.78x, indicating strong organic growth funding capability.
  • Tangible assets of 15.11B provide robust 21.81x coverage of other current liabilities 692.94M, indicating strong asset backing.
  • Cash position of 1.08B provides exceptional 24.81x coverage of minority interest expenses 43.53M, indicating strong liquidity.

Bear case

  • Operating cash flow of 3.47B barely covers its investment activities of (743.53M), with a coverage ratio of -4.67, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 3.47B provides thin coverage of dividend payments of (1.09B) with a -3.19 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Free cash flow of 2.55B represents just -3.11x of debt issuance (822.35M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • High financing cash flow of (3.40B) relative to working capital of (1.77B), which is 1.92x suggests concerning dependence on external funding for operational needs.
  • Tax assets of 23.53M provide limited offset against tax liabilities of 4.34B, which is 0.01x, indicating potential future cash flow pressure from tax obligations.

Peer comparison

Companies in the Beverages - Non-Alcoholic
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 KO Coca Cola Co 359.59 Bn 41.22 7.57 47.42 Bn
2 PEP Pepsico Inc 221.63 Bn 26.90 2.36 49.18 Bn
3 MNST Monster Beverage Corp 80.88 Bn 46.84 10.14 0.11 Bn
4 CCEP COCA-COLA EUROPACIFIC PARTNERS plc 48.53 Bn 20.84 1.97 12.58 Bn
5 COKE Coca-Cola Consolidated, Inc. 15.28 Bn 534.08 9.79 1.92 Bn
6 CELH Celsius Holdings, Inc. 10.33 Bn 399.18 4.86 0.86 Bn
7 KDP Keurig Dr Pepper Inc. 5.72 Bn 8.07 0.94 15.85 Bn
8 FIZZ National Beverage Corp 3.42 Bn 18.34 2.85 0.07 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.99 3.00
EV to Cash from Ops. EV/CFO 20.15 25.34
EV to Debt EV to Debt 5.56 82.79
EV to EBIT EV/EBIT 20.70 35.67
EV to EBITDA EV/EBITDA 17.20 24.62
EV to Free Cash Flow [EV/FCF] EV/FCF 27.41 40.15
EV to Market Cap EV to Market Cap 1.44 2.70
EV to Revenue EV/Rev 2.85 3.95
Price to Book Value [P/B] P/B 5.27 15.38
Price to Earnings [P/E] P/E 20.84 112.66
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 2.51 -230.19
Dividend Payout Ratio % Div Payout % (Qtr) 46.50 -1.98
Dividend per Basic Share Div per Share (Qtr) 2.33 0.88
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 49.07 30.31
Interest Coverage Int. cover (Qtr) 9.40 3.00
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 4.42 -59.79
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -33.67 125.83
Dividend Growth (1y) % Div 1y % (Qtr) 18.27 -6.02
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 51.88 -5.50
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 35.55 4.45
EBIT Growth (1y) % EBIT 1y % (Qtr) 47.06 70.95
EBT Growth (1y) % EBT 1y % (Qtr) 49.87 3.85
EPS Growth (1y) % EPS 1y % (Qtr) 56.21 5.85
FCF Growth (1y) % FCF 1y % (Qtr) 14.74 19.77
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 16.53 12.14
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.82 1.15
Cash Payout Ratio Cash Payout (Qtr) 0.25 0.16
Cash Ratio Cash Ratio (Qtr) 0.12 0.76
Current Ratio Curr Ratio (Qtr) 0.80 1.78
Debt to Equity Ratio Debt/Equity (Qtr) 1.36 1.22
Interest Cover Ratio Int Coverage (Qtr) 9.40 3.00
Times Interest Earned Times Interest Earned (Qtr) 9.40 3.00
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 17.40 9.71
EBIT Margin % EBIT Margin % (Qtr) 11.69 6.85
EBT Margin % EBT Margin % (Qtr) 12.29 5.02
Gross Margin % Gross Margin % (Qtr) 35.60 40.60
Net Profit Margin % Net Margin % (Qtr) 9.50 2.49