coca cola amatil: a tale of two stories

Due to the recent downgrade on its profit forecast, CCA SP is 5 years low. There are two stories on the market.

=> life-time opportunity to invest in CCA
Strong buy while stating the problem is temporary and profit can be increased through significant cost reduction.
http://www.fool.com.au/2014/04/24/why-coca-cola-amatil-ltd-is-the-best-stock-you-can-buy/


=> Sell this stock.
Downgrade to "Sell" from Standard & Poor's, Moody and Wells Fargo & Co. And, BNY Mellon ceased to be a significant holder. There are warning signs of the a troubled company.

I understand it is difficult to be forward looking for any companies in general. However, it is evident that the soft drink demand has been weaken and set to get worse, as consumers' taste change. This is reflected in Coca cola global revenues which fall for the first time in 10+ years. The parent coca cola company is only profitable in developing countries. Given the majority of CCA is from the non-alcohol beverage 70%+ in Australia, aggresive pricing from Woolworth and coles and competition of cheaper private label drink, the downgrade in profit is difficult to be reverse but can be slowed through cost-cutting management. However, as with any businesses, the effect of cost reduction is limited and does not change its long term outlook.

TWO stories for us to think about:
Story one: people in Australia and New Zealand will drink more soda drinks and willing to pay premium for Coca Cola

Story two: people changes their taste to natural drinks and other alternatives. While CCA has diversified in different drinks, its flagship product COKE still remains the main driving force.