Is the fizz about to go from the Coca-Cola HBC share price?
Those with a vested interest in the Coca-Cola HBC (LSE:CCH) share price have probably read that the drinks giant’s expanding its product range in America by introducing a version of its top-selling beverage sweetened with cane sugar instead of high-fructose corn syrup.
The Coca-Cola Company confirmed the move after pressure from President Trump. The group’s boss said it was part of its ongoing strategy to “reflect consumer interest in differentiated experiences“. With over 60 variations of Coke sold all over the world, the company has a long history of tweaking its best-seller. And not all of these are available in each of its markets.
Due to these regional variations, I think it’s important to distinguish between the stock that’s traded on the London Stock Exchange and that in New York. The UK group (Coca-Cola HBC) is separate — although the US company retains a shareholding of around 21% — and holds the exclusive bottling rights in 28 countries, stretching from Ireland to Nigeria.
The grass isn’t always greener…
In the world of investing, we’re sometimes led to believe that everything’s better on the other side of the Atlantic. But when it comes to Coca-Cola, this doesn’t appear to be the case.
That’s because, since July 2024, the Coca-Cola HBC share price has risen 42%. This makes it the 14th best performer on the FTSE 100. Over that past five years — since July 2020 — it’s soared over 90%. By contrast, The Coca-Cola Company stock price has risen by only 5% over the past year and 43% during the last five.
The UK-listed group’s 2025 first-quarter results revealed a 10.6% rise in organic revenue. Emerging markets saw a 20.3% increase. This is against an economic backdrop that the company describes as “challenging and unpredictable”.
It follows a great 2024 during which the company increased organic sales by 13.8% and operating profit by 24.3%. This performance is particularly impressive given that conventional wisdom suggests business growth slows over time. The first Coke was poured in 1886.
The group’s targeting medium-term annual organic revenue increases of 6%-7% over 2024 levels.
Possible issues
But Coca-Cola HBC’s not the cheapest stock around. It trades on 18 times consensus earnings for 2025, comfortably above the FTSE 100 average.
And although it’s increased its dividend every year since being listed in 2013 (excluding a special payout in 2019), its present (25 July) yield of 2.2% isn’t the most attractive.
Also, it faces a persistent challenge from its fierce rival, Pepsi. The ‘Pepsi Paradox’ confirms that in blind taste tests, Pepsi is overwhelmingly more popular. But when consumers see the labels, they prefer Coke. This shows the power of marketing and probably explains why Coca-Cola spends $5bn on global advertising each year.
My view
But despite these challenges I think it’s well placed to grow over the coming years.
With rising sales — most notably in emerging markets — and an effective “24/7 strategy” which is all about offering “drinks for all occasions around the clock” — it continues to improve both its top and bottom lines.
For these reasons, investors could consider adding the stock of one of the most recognisable global brands to their portfolios.
The post Is the fizz about to go from the Coca-Cola HBC share price? appeared first on The Motley Fool UK.
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James Beard has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
