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Bull: CCEP successfully passes pricing increases without volume degradation.
Elasticity Breakpoint: Consumers reject sustained price hikes, driving permanent volume declines and private label substitution.
Coca-Cola Europacific Partners (CCEP) is an entrenched, high-quality bottler generating roughly $2 billion in annual free cash flow. While it operates with structurally lower margins than franchisors like KO, its local monopoly on distribution and vast scale provide a wide economic moat. It is a predictable compounder actively returning capital through dividends and buybacks.
Coca-Cola Europacific Partners (CCEP) is an entrenched, high-quality bottler generating roughly $2 billion in annual free cash flow. While it operates with structurally lower margins than franchisors like KO, its local monopoly on distribution and vast scale provide a wide economic moat. It is a predictable compounder actively returning capital through dividends and buybacks.
Exclusive territorial distribution agreements for top global beverage brands.
Massive local distribution density creating insurmountable scale advantages.
Normalized supply chains and highly stable consumer staples demand driving margin expansion.
Buy. Wide expectations gap compared to structural cash generation capabilities.
Coca-Cola Europacific Partners PLC, together with its subsidiaries, produces, distributes, and sells a range of non-alcoholic ready-to-drink beverages. It offers flavours, mixers, energy drinks, soft drinks, water, enhanced water, isotonic drinks, tea and coffee, juices, and other drinks. The company provides its products under the Coca-Cola Original Taste, Coca-Cola Zero Sugar, Diet Coke, Sprite, Sprite Zero Sugar, Fanta, Fanta Zero Sugar, Monster Energy, A&W, Absolut Vodka & SPRITE, Ades, Appletiser, aquaBona, Aquarius, BACARDÍ Mixed with Coca Cola RTD, Barista Bros, Bonaqua, BURN, Deep Spring, Dr Pepper, Dr Pepper Zero Sugar, Feral Brewing Co, Fuze Tea, Giancarlo Coffee, GLACEAU smartwater, Grinders, HALO, Jack Daniel's & Coca-Cola ready-to-drink, Kristal, L&P, MER, Minute Maid, Mother, Mount Franklin, Nordic Mist, Nutriboost, Oasis, Pulpy, pump, pumped, Reign, Rekorderlig Cider, Relentless, Royal, Royal Bliss, Schweppes, Schweppes Mix, SOCO, URGE, Vilas del Turbón, Voyage, Wilkins Pure, and Zephyr Coffee Co brands. It is also involved in the bottling and other operations. The company was formerly known as Coca-Cola European Partners plc and changed its name to Coca-Cola Europacific Partners PLC in May 2021. The company was founded in 1904 and is based in Uxbridge, United Kingdom.
Consumer elasticity reaches a tipping point amid sticky wage and packaging inflation, compressing operating margins back toward 10% and stunting free cash flow generation.
Exclusive territorial distribution agreements for top global beverage brands.
Massive local distribution density creating insurmountable scale advantages.
Inelastic consumer demand profile for defensive anchor brands.
Economic profit is supported when reported returns exceed the company cost-of-capital hurdle.
Unavailable
The highlighted base cell is anchored to valuation synthesis sensitivity reference ($115.74). It is the reference value for this grid, not a separate standalone fair-value claim.
FCFF DCF remains positive at the base case: base FCFF $2.5B after capex $1.1B, with at 69.0% of . No cliff is projected unless capex/ or materially resets.
Watch volume resilience against structural price increases. If volumes hold, margins expand toward 15%. If volumes break, margins revert to 10%.
Watch volume resilience against structural price increases. If volumes hold, margins expand toward 15%. If volumes break, margins revert to 10%.
Watch volume resilience against structural price increases. If volumes hold, margins expand toward 15%. If volumes break, margins revert to 10%.
Watch volume resilience against structural price increases. If volumes hold, margins expand toward 15%. If volumes break, margins revert to 10%.
Normal phase. Mature, predictable maintenance capex required to sustain existing local monopolies.
Normalized supply chains and highly stable consumer staples demand driving margin expansion.
Severe commodity and labor inflation combined with weak consumer purchasing power.
Normal phase. Mature, predictable maintenance capex required to sustain existing local monopolies.
Core portfolio holding given highly defensive characteristics and visible cash flow baseline.
Reassess if operating margins structurally breach 12% or capex-to-D&A exceeds 1.2x permanently.
Strong Buy. The asset trades at an excessively pessimistic valuation despite durable local monopolies and highly visible $2B+ annual free cash flow.
The market prices in negative implied growth, creating a compelling expectations gap. CCEP’s 20-year moat-fade trajectory justifies a premium to standard near-term internal valuation anchors.
Buy. The asset trades at an excessively pessimistic valuation despite durable local monopolies and highly visible $2B+ annual free cash flow.
Reassess the thesis against the named valuation, risk, and quarterly checkpoint evidence in this report.
Capture your own thesis, position size, and follow-up questions. Stays on this device, only you can see it.
Consumer elasticity reaches a tipping point. Sticky wage and packaging inflation compresses operating margins, stunting free cash flow generation and halting multiple re-rating.
Consumers reject sustained price hikes, driving permanent volume declines and private label substitution.
Primary franchisor aggressively hikes concentrate pricing, forcing the bottler to absorb the margin compression.
Maintenance capex-to-D&A structurally rises above 1.2x, permanently impairing free cash flow conversion.
The five developments that would weaken our investment case.
Margin erosion indicates that packaging inflation and higher distribution costs cannot be offset by pricing actions, impairing operating leverage and lowering overall return on invested capital.
Current:13.4% for the period ended 2025-12-31
Alert if< 12.0% for two consecutive quarters
A structural decrease in cash flow conversion limits organic capital generation, restricting capacity for dividend distributions, debt service, and essential modernization investments across bottling facilities.
Current:1.521 as of 2026-05-20
Alert if< 1.20 over any trailing twelve months
Negative revenue trajectory signals consumer pushback against beverage price hikes and acceleration toward private label alternatives, undermining volume-based operational efficiencies across distribution territories.
Current:2.3% for the period ended 2025-12-31
Alert if< 0.0% over any full fiscal year
Severe concentrate cost increases imposed by franchisors squeeze unit profitability, proving the bottler lacks pricing power to pass upstream cost inflation to retail partners and consumers.
Current:35.6% for the period ended 2025-12-31
Alert if< 33.0% across any full fiscal year
Subdued capital productivity reduces economic value add across European and Pacific bottling assets, jeopardizing management's targeted share repurchase cadence and dividend payout capacity.
Current:12.1% as of 2026-05-20
Alert if< 10.0% over any trailing twelve-month period
Each lens answers a different valuation question. Only included lenses set Fair value; floors and diagnostics provide context.
Project SBC-adjusted EPS, discount each year's earnings at cost of equity, then add a Gordon-growth terminal value.
This edition does not contain enough finite inputs to reproduce the lens calculation.
Project EPS through the explicit advantage period, fade growth as competition catches up, and discount the full stream at cost of equity.
This edition does not contain enough finite inputs to reproduce the lens calculation.
Apply a terminal P/E to the dated forward EPS path, then discount that future share value back to the analysis date.
This edition does not contain enough finite inputs to reproduce the lens calculation.
Convert the revenue and margin path into after-tax free cash flow, discount the annual per-share amounts and terminal value at , then adjust for signed per current share.
Add depreciation to net income, subtract maintenance capex, divide by diluted shares, and apply a normalized valuation multiple.
CCEP successfully passes pricing increases without volume degradation. Bolt-on acquisitions and continuous share retirements drive compounding, leading to multiple expansion closer to 20x.
Valuation is grounded in structural cash generation and a 20-year moat-fade trajectory. Current market pricing incorrectly implies zero-to-negative long-term volume growth, creating an expectations gap.
Warning level: < 12.0% for two consecutive quarters. Margin erosion indicates that packaging inflation and higher distribution costs cannot be offset by pricing actions, impairing operating leverage and lowering overall return on invested capital.
Warning level: < 1.20 over any trailing twelve months. A structural decrease in cash flow conversion limits organic capital generation, restricting capacity for dividend distributions, debt service, and essential modernization investments across bottling facilities.
Warning level: < 0.0% over any full fiscal year. Negative revenue trajectory signals consumer pushback against beverage price hikes and acceleration toward private label alternatives, undermining volume-based operational efficiencies across distribution territories.
Warning level: < 33.0% across any full fiscal year. Severe concentrate cost increases imposed by franchisors squeeze unit profitability, proving the bottler lacks pricing power to pass upstream cost inflation to retail partners and consumers.
Warning level: < 10.0% over any trailing twelve-month period. Subdued capital productivity reduces economic value add across European and Pacific bottling assets, jeopardizing management's targeted share repurchase cadence and dividend payout capacity.
| $18.30B |
| $20.44B |
| $20.90B |
| +6.5% |
| Gross profit | $6.22B | $6.72B | $7.21B | $7.44B | +6.1% |
| Operating income | $2.12B | $2.37B | $2.18B | $2.84B | +10.3% |
| Net income | $1.51B | $1.67B | $1.42B | $1.94B | +8.8% |
| EPS (diluted) | $3.29 | $3.63 | $3.08 | $4.26 | +9.0% |
| EBITDA | $2.94B | $3.16B | $3.11B | $3.77B | +8.7% |
| R&D | — | — | — | — | — |
| SG&A | $1.99B | $2.20B | $2.35B | $2.35B | +5.8% |
Capital allocation should be evaluated against reinvestment needs, balance-sheet strength, and shareholder returns.
| Revenue | 20,901,000,000 |
|---|---|
| Cost of revenue | 13,461,000,000 |
| Gross profit | 7,440,000,000 |
| Operating expenses | 4,648,000,000 |
| Operating income | 2,792,000,000 |
| Non-operating items and tax | -850,000,000 |
| Net income | 1,942,000,000 |
| Total assets | 29,254,000,000 |
|---|---|
| Cash | 1,419,000,000 |
| Current assets | 6,605,000,000 |
| Total liabilities | 21,278,000,000 |
| Current liabilities | 7,278,000,000 |
| Shareholders’ equity | 7,976,000,000 |
Point-in-time financial data used in the 2026-05-20 analysis.
| Period | Revenue | EBITDA | Net income | Operating cash flow | Free cash flow | Capex | Depreciation and amortization | Stock-based compensation | Share repurchases | Dividends paid | Net debt issuance | Investing cash flow | Financing cash flow | Beginning cash | Ending cash | Cash and investments | Total debt | Operating margin | ROIC | WACC | ROIC − WACC spread |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022-12-31 | 17.3B | 2.9B | 1.5B | 2.9B | 2.3B | 603M | 816M | 33M | 0 | 763M | -1.2B | — | — | — | — | 1.4B | 11.9B | 12.9% | — | — | — |
| 2023-12-31 | 18.3B | 3.2B | 1.7B | 2.8B | 2B | 812M | 792M | 57M | 0 | 841M | -465M | — | — | — | — | 1.4B | 11.4B | 12.7% | — | — | — |
| 2024-12-31 | 20.4B | 3.1B | 1.4B | 3.1B | 2.1B | 939M | 933M | 45M | 0 | 910M | -199M | — | — | — | — | 1.6B | 11.3B | 12.4% | — | — | — |
| 2025-12-31 | 20.9B | 3.8B | 1.9B | 3B | 2B | 950M | 923M | 47M | 1B | 927M | -497M | — | — | — | — | 918M | 10.7B | 13.4% | — | — | — |
CCEP trades at 16.2x forward earnings against a peer median of 23.5x; EV/EBITDA of 15.0x against a peer median of 22.9x; 6 peers.
This edition does not contain enough finite inputs to reproduce the lens calculation.
This edition does not contain enough finite inputs to reproduce the lens calculation.
| PEP |
| PepsiCo Inc. |
| 16.4x |
| 2.2x |
| 13.2x |
| 43.9% |
| 17.0% |
| MNST | Monster Beverage Corporation | 33.5x | 9.6x | 28.9x | 26.7% | 31.0% |
| KDP | Keurig Dr Pepper Inc. | 11.4x | 2.3x | 17.0x | 6.3% | 19.0% |
| WMT | Walmart Inc. | 40.8x | 1.5x | 25.8x | 21.8% | 4.6% |
