Broker tips: Coca-Cola Hellenic, RS Group, Anglo Pacific

(Sharecast News) - Analysts at Deutsche Bank raised their target price on Coca-Cola Hellenic from 2,475.0p to 2,525.0p on Wednesday, stating they were expecting "another solid release" from the firm. Deutsche Bank said Coca-Cola's interim results "should" demonstrate underlying progress, with the analysts anticipating organic volume growth of 3.9%, organic sales growth of 14.4%, and organic underlying earnings growth of -5.1%.

The German bank also expects reported sales of €3.98bn and reported underlying earnings of €349.0m on an EBIT margin of 8.7%.

"We believe the company will reinstate guidance for FY22 and expect -8.6% organic EBIT growth," said DB, which also reiterated its 'buy' rating on the stock.

Analysts at Berenberg lowered their target price on industrial and electronics products distributor RS Group from 1,230.0p to 1,010.0p on Wednesday but acknowledged that the group was "on a roll".

Berenberg said the group formerly known as Electrocomponents' recent first-quarter trading update came with the firm's sixth consecutive upgrade to earnings.

The German bank said the reasons for RS' upgrades were "stronger and more resilient" end-market growth than previously expected, consistent market share gains, a markedly improved Asia-Pacific business, disciplined pricing, supply chain and cost management, and selective mergers and acquisitions.

"While industrial data points to slowing growth in industrial activity, to which RS Group is not immune, the group has shown the ability to significantly outperform, and we expect that to continue. For FY 2024, shares trade on 15x P/E and 10x EV/EBITDA," said the analysts.

Berenberg, which stood by its 'hold' rating on the stock, said the downgrade to its price target and valuation on RS came as a result of efforts to reflect changes in peer-based multiples.

Analysts at BofA Securities reiterated their 'buy' rating for shares of Anglo Pacific Group, telling clients that its recent acquisition of four royalties from South32 reflected its pivot away from coal towards electrification metals.

Anglo Pacific purchased the four royalties in copper and nickel on Tuesday for $200.0m, including contingent payments, an amount equivalent to half the company's market value.

Bank of America said it liked the transaction from a strategic point of view as the company pivoted towards so-called "future facing commodities", which include battery metals, copper, nickel, and cobalt.

BofA added that after including the transaction and the group's royalty on Brazilian Nickel's Piaui project, its target price had increased from 220.0p to 230.0p, or one times' the value of its discounted cash flow-derived net present value.

"Reiterate 'buy', we see rerating potential as APF executes on its strategy. We also see the royalty business model as defensive during periods of volatile prices and high cost inflation," said BofA.