Coca-Cola Icecek: mispriced given the strength of delivery (stays BUY) (Resend due to technical difficulties)

We maintain our BUY rating on Coca-Cola Icecek (CCI) and raise our price target (PT) to TRY 231.9, from TRY 172.3. We believe the investment community is overlooking CCI’s strong defensive-growth business model, with robust execution, and its attractive growth outlook. We have updated our figures to incorporate our revised domestic volume estimates, macroeconomic forecasts and the 1H22 results. Although we acknowledge that 2H22E may be challenging in terms of volumes and margins, due to the high base in 2H21 and higher transportation costs, we still expect a step-change in growth in EBITDA and net earnings in 2022E, and foresee another set of good results in 2023E, with 54% yoy increase in both revenues and EBITDA. On valuation grounds, CCI has been derated sharply in the last three months, and its discount to its EM peers, based on the 12-month forward EV/EBITDA multiple, has widened to 51%, the highest level in a year, as it trades at 3.4x 2023E EV/EBITDA and 5.5x 2023E P/E on our estimates. Given the growth and cash flow generation, we believe this discount is unjustified.