Coca-Cola Icecek: raising the bar again (stays BUY)

We reiterate our BUY rating on Coca-Cola Icecek (CCI) and raise our price target (PT) to TRY 275.5 from TRY 231.9. We have updated our model with the 2022 volumes, our revised macroeconomic forecasts, and recent commodity prices. We believe that CCI should continue to benefit from its strong market positioning and pricing power, delivering solid operating results in 2023E as a combination of: i) volume, mix, and pricing-driven revenue growth; ii) resilient operating margins; and iii) a lower NWC requirement. In our revised estimates, we forecast 70% yoy growth in revenues and 66% yoy growth in EBITDA, indicating an EBITDA margin of 18.3%, -39bp yoy in 2023E, above the pre-pandemic margins. On the bottom line, we expect net earnings to double in 2023E and project a 49% CAGR in net earnings between 2022 and 2025E. On valuation grounds, CCI trades at a 49% discount to its EM peers, based on our 12M forward EV/EBITDA multiple, which is higher than the 1Y and 3Y median discounts of 38% and 29%, respectively. Given the earnings growth and cash-flow generation, we believe the current discount level is unjustified.