Nomura Raises Price Target On Coca-Cola

Nomura maintained a Buy rating on The Coca-Cola Co KO and raised its price target from $51.50 to $54 in a report issued Wednesday.

Analyst Ian Shackleton saw "just as great an opportunity as before."

Shackleton estimated "that all the upside from potential strategies still gives a theoretical value of $76/share, despite a slightly lower core DCF value ($43 vs previous $45) owing to rebasing post-3Q results."

"The strategic initiatives announced last week are a step in the right direction, but the pace needs to step up considerably. We estimate that an LBO approach could justify a value of $90/share, which would more than justify a 25 percent premium on the current price to gain control," according to the report.

Shackleton analyzed "a possible LBO finance structure" and showed that his "estimated FCF for the equity investment in ‘New Coke’ on an LBO [estimated at $50 billion] would be more than the FCF currently earned by KO shareholders (with a market cap about four times the size)."

The Coca-Cola Company recently traded at $40.90, up 0. percent.