The Coca-Cola Amatil Ltd (ASX: CCL) share price closed 5% higher yesterday at $11.93 despite the bottler and beverage distributor not releasing any specific news to the market.
This sizeable move is unusual for a blue-chip business with the shares probably climbing on the back of news reports that analysts at Macquarie Group Ltd (ASX: MQG) upgraded their rating on the stock to ‘neutral’, while lifting their price target to $11.20.
Coca-Cola is among a number of ASX blue chips such as Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW) printing new 52-week highs on the back of a macro environment coercing investors into accepting lower yields from businesses considered ‘defensive’.
Over FY 2019 Coca-Cola paid 51 cents per share in dividends to place it on a trailing yield of 4.3%. This is way ahead of a term deposit and attractive to some retail and institutional investors alike.
In a bid to halt its recent earnings slide Coca-Cola has spent the last two years pulling costs out of the business and is targeting a return to profit growth over calendar 2020.
Over the medium term it’s also retaining a target to deliver mid-single digit earnings per share growth from 2020 onwards.
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Motley Fool contributor Tom Richardson owns shares of Macquarie Group Limited. The Motley Fool Australia owns shares of and has recommended Macquarie Group 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.
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