With its shares down 27 per cent over the past year, and with a...

With its shares down 27 per cent over the past year, and with a new chief executive in place, maybe the sell-off is overdone, at least that is the view of Citi when looking at Coca-Cola Amatil.

It reckons the shares are worth $14.60, which is well north of where they are trading today at $11.26.

Citi's analysts see a series of reasons why Coca-Cola Amatil is worth a look from the fact that it is the cheapest Coke bottler, with its gross margin of 43 per cent in line with other bottlers with price rises that are not out of line with food inflation.

"Recent poor results and the appointment of a new managing director has provided an attractive buying opportunity for investors," Citi told clients in a note this morning.

"Earnings will bounce back from short term price competition and FY13 de-stocking. The new managing director is expected to re-base Coca-Cola Amatil’s earnings. However, this appears priced in.

"Coca-Cola Amatil has gone from trading at a 10 per cent premium to Coca-Cola Enterprises (its closest peer) a year ago to now trading at a 20 per cent discount."

As a result, it reckons the shares are a "buy".


Read more: http://www.smh.com.au/business/markets-live/markets-live-miners-banks-fall-20140312-34kwg.html#ixzz2viGeVziu