Kepler Cheuvreux analyst Richard Withagen has downgraded Coca-Cola HBC stock to Reduce from Hold, cutting his target price to 3,400p from 3,830p. He argues the planned $3.4 billion acquisition of Coca-Cola Beverages Africa (CCBA) will hinder near-term value creation and weigh on returns.

Withagen points to execution risks at a time when CCH's valuation already looks demanding. He notes CCBA's performance has been underwhelming, with 2024 EBIT below pre-pandemic levels. The deal adds roughly a quarter of group revenues but offers minimal growth improvement, as CCBA's organic revenue growth has lagged behind CCH's own rate.

The analyst projects CCBA's average EBIT margin of around 6% would need to double for the acquisition to become value accretive—a process he believes will take multiple years. In the near term, the deal is expected to dilute group profitability metrics, including EBIT margin and return on invested capital.