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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. Fair value range: low $91.3, high $140, with mid-point at $116.
Stock analysis

CCEP fair value $91–$140

By StockMarketAgent.AI team· supervised by
Analyzed: 2026-05-20Next update: 2026-08-20Methodology v2.4Data cut-off: Quality gate: passSources: all material sources passed deterministic freshness/provenance gatesReview: automatedArchetype: Mature compounder
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Last price
$91.86
▲ +23.88 (+26.00%)
Fair value
$116
$91–$140
Rating
Strong Buy
confidence 88/100
Upside
+26.0%
upside to fair value
Margin of Safety
$98.38
MoS level · 15%
Market Cap
$40.7B
P/E fwd 16.2

§1 Executive summary

  • Defensive consumer staples compounder producing $2B+ in annual free cash flow.
  • Trading at a steep discount to structural moat-fade intrinsic value of $115.74.
  • Market implicitly prices zero-to-negative volume growth, ignoring durable ROIC.
  • Stable 13.3% operating margins prove successful pass-through of severe cost inflation.
Fair value
$116
Margin of safety
+20.6%
Confidence
88/100
Moat
9/10

Educational analysis only — not financial advice. Always do your own due diligence.

$91.86Price
Low $91.30
Mid $115.74
High $140.15

Coca-Cola Europacific Partners (CCEP) is an entrenched, high-quality bottler generating roughly $2 billion in annual free cash flowFree cash flowOperating cash flow minus capital expenditures. The cash a business generates after maintaining and growing its asset base — the closest accounting proxy for owner-economics.. While it operates with structurally lower margins than franchisors like KO, its local monopoly on distribution and vast scale provide a wide economic moatMoatA durable structural advantage that protects long-term returns on capital from competition. Sources include network effects, switching costs, intangible assets, cost advantages, and efficient scale.. It is a predictable compounder actively returning capital through dividends and buybacks.

  • Exclusive territorial distribution agreements for
    Exclusive territorial distribution agreements for top global beverage brands.
  • Massive local distribution density creating
    Massive local distribution density creating insurmountable scale advantages.
  • Cycle upside
    Normalized supply chains and highly stable consumer staples demand driving margin expansion.

§2 Bear case

Consumer elasticity reaches a tipping point amid sticky wage and packaging inflation, compressing operating margins back toward 10% and stunting free cash flowFree cash flowOperating cash flow minus capital expenditures. The cash a business generates after maintaining and growing its asset base — the closest accounting proxy for owner-economics. generation.

Ways this thesis can break

Elasticity Breakpoint

· Medium

Consumers reject sustained price hikes, driving permanent volume declines and private label substitution.

FV impact
Downside to $91.30
Trigger
12-24 Months

Franchisor Margin Extraction

· Low

Primary franchisor aggressively hikes concentrate pricing, forcing the bottler to absorb the margin compression.

FV impact
Sub-$80s Valuation
Trigger
24-36 Months

Capital Intensity Spike

· Low

Maintenance capex-to-D&A structurally rises above 1.2x, permanently impairing free cash flow conversion.

FV impact
15% Intrinsic Value Reduction
Trigger
36+ Months
Early-warning signals to monitor
MetricCurrentTrigger threshold
Operating margins compress below 12.0% for two consecutive quarters.MonitorDeterioration versus the report thesis
Maintenance capex-to-D&A structurally rises above 1.2x.MonitorDeterioration versus the report thesis
Volume declines exceed low-single digits despite flat macro environment.MonitorDeterioration versus the report thesis
Adverse shifts or renegotiations in franchisor territorial agreements.MonitorDeterioration versus the report thesis
Free cash flow conversion drops permanently below historical $2B baseline.MonitorDeterioration versus the report thesis

§3 Financial history

Income statement — last six periods
Line itemT−0T−1T−2T−3CAGR
Period2022-12-312023-12-312024-12-312025-12-31Trend
Revenue$17.32B$18.30B$20.44B$20.90B+6.5%
Gross profit$6.22B$6.72B$7.21B$7.44B+6.1%
Operating income$2.23B$2.33B$2.54B$2.79B+7.7%
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%

Quality scores

Piotroski F-score
7 / 9
0–9 quality composite
Altman Z-score
2.5
Bankruptcy risk (>3 safe)
Beneish M-score
-2.61
Earnings manipulation risk
OCF / Net income
1.52×
>1 indicates high earnings quality
Accounting quality gate
Pass
Sector-adjusted gate
ROIC
12.1%
Return on invested capital
§3

Numbers analysis

Cash flow

Cash-flow quality is reflected in the OCFOperating cash flowCash generated from the company's core operations after working-capital changes but before capital expenditures. The first line of the cash-flow statement. / net incomeNet IncomeNet Income is an income-statement line item used to reconcile revenue to operating profit, pre-tax income, net income, or per-share earnings. It should be compared across periods and against peer disclosure conventions., accounting-quality, and ROICROICReturn on invested capital. Operating profit (after tax) divided by invested capital. The single best gauge of capital-efficiency. Spread over WACC = economic value created. rows above.

Capital allocation

Capital allocation should be evaluated against reinvestment needs, balance-sheet strength, and shareholder returns.

Individual subscribers — §4 onwards11 more sections

Read the full analysis — 11 more sections.

Competitive moat, industry cycle, peer comparison, intrinsic valuation, sensitivity, scenarios, earnings decision tree, position management, investor perspectives, scorecard, and final recommendation.

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FAQ

CCEP — frequently asked questions

  1. Based on our latest analysis, CCEP looks meaningfully undervalued. The current price is $91.9 versus a composite fair-value midpoint of $116 (range $91.3–$140), which implies roughly 26.0% upside to the midpoint.

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