Fairlife Production Halted on Cyberattack; Remain OW

研报英文原文证据摘录

Fairlife Production Halted on Cyberattack; Remain OW

.48 3.70

uncertain remedy today, and there is some share risk, particularly with a P/E 23.3 25.3 23.5 22.0

proliferation of brands recently within the high growth category. With the stock up Div yld (%) 2.9 2.6 2.7 2.8

23% YTD, far above mega-cap peers PG/PEP/CL at +9%, and positive sentiment, we Unless otherwise noted, all metrics are based on Morgan Stanley ModelWare

framework

expect KO's stock will be down on the news, but we'd be buyers on any weakness ** = Based on consensus methodology

§ = Consensus data is provided by Refinitiv Estimates

and remain OW LT as our Top Pick (see thesis below) due to the compelling LT e = Morgan Stanley Research estimates

growth story and our view here that long-term Fairlife growth prospects are

intact, albeit with short-term uncertainty.

OW Thesis: We continue to see Coke as very well-positioned long-term, with

sustained +MSD% OSG growth well above mega-cap peers in the +LSD% range. We

see four key points as driving Coke’s relatively higher growth: (1) structural pricing

growth well above peers due to company-specific pricing power with consistent

Coke market share gains and higher marketing than peers in recent years, as well as

greater inherent pricing power in Coke's beverage category with lower private label

penetration and benign competitive dynamics, as well as geographies (skew to

emerging markets); (2) underappreciated growth contribution from the well-

positioned Fairlife business in the ~100+ bp range going forward to corporate KO

OSG given a potential 25%+ Fairlife CAGR with strong Protein drink category

growth and Fairlife share gains, fueled by its unique filtration process and Coke's

strong distribution system, and augmented by building capacity, although we note