Will Coca-Cola Amatil Ltd lose its fizz soon?

Credit: Coca Cola

Shares in Coca-Cola Amatil Ltd (ASX: CCL) are down slightly to $9.29 today after a trend upwards for the stock since late 2017.

But will intense pricing pressure from competitors and overall competition across the grocery sector, coupled with a health-directed move away from fizzy drinks, start to hit the margins of Coca-Cola soon?

Morgan Stanley have this month upheld its underweight rating on the stock with an $8.00 price target, noting concerns about competition from the Indonesian beverages market with diversification key to overcoming softening in its fizzy drink segment.

Coca-Cola’s annual result reported underlying NPAT of $416.2 million in line with guidances, but trading revenue was down 2.8% to $4.93 billion while capital expenditure increased to $312.2 million from $295.7 million in FY16.

The company’s $10 million investment in start-ups could open up new opportunities as Coca-Cola inevitably searches for a new flagship product as demand for sugary drinks sours.

Also in the global beverage space Treasury Wine Estates Ltd (ASX: TWE) appear to be kicking goals, with today’s share price of $18.67 up 53% on its $12.17 price at this time last year.

Freedom Foods Group Ltd (ASX: FNP) is also going great guns with its share price up 30% in the last 12 months.

Breaking news: ASX companies set to raise dividends!

It's been a nail-biter of a reporting season here in the first half of 2018.

But the real action, in my opinion, is what companies are doing with dividends.

What does this mean for you? Well there is one stock I've found that could very well turn out to be THE best buy of 2018. And while there's no such thing as a 'sure thing' when it comes to investing - this ripper might come as close as I've ever seen.

Click here it's FREE!

Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Coca-Cola Amatil Limited, Freedom Foods Group Limited, and Treasury Wine Estates Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.