At a time when strong third-quarter bank results were improving investor sentiment and valuations, a combination of news from the US and Russia brought a «world war» to stock markets, including the Greek bourse.
Wall Street plunged on Thursday, delayed by one day, due to the outcome of the midterm elections.
The technology sector faced heavy selling pressure, dragging everything down in its wake.
Another piece of negative news also arrived from the US that affected a Greek stock, that of Titan, though perhaps due to the news from Russia, investors did not pay much attention during Thursday session, but did so on Friday.
Hammering due to Russia
The first «missile» that triggered the collapse of valuations, however, arrived from Russia.
The stock of Coca Cola lost 3.1 billion euros of its total valuation during Thursday session, and its price landed at 50.5 euros following reports from Russia. If calculated against the intraday high of 60.40 euros, the loss rises toward 3.7 billion euros. In yesterday session the decline continued, shedding another 317 million euros from its valuation. The central question remains how much the operation in Russia is actually worth.
What Russia brings to the balance sheet
Russia accounts for roughly 20% of the Group EBIT for 2026 (estimate), but a much larger share of free cash flow (FCF), according to Eurobank Equities.
An indicative valuation of the Russian operations of Coca Cola totaling roughly 2.7 billion euros, as reported by «Kommersant», would lead to a maximum permitted sale price of about 1.1 billion euros (approximately 2.8 euros per share) under the standard 60% discount applied.
With the stock having lost more than 10 euros, the brokerage noted on Friday, commenting that shares seem to have already priced in a complete write-off of Russia, according to its calculations.
Optima Bank comments that from 2022 onward, Coca Cola has not disclosed the contribution of its activities in Russia; nevertheless, a full expropriation and deconsolidation of operations there would be significant, but would not threaten its balance sheet.
The most reasonable estimate is a loss of approximately 14% of sales volume, 10 to 11% of revenue, 20 to 21% of EBIT, 20 to 22% of recurring earnings per share (EPS), and 1 billion euros in reported cash reserves. Net debt would rise to approximately 1.2 to 1.3 times based on earnings without Russia.
Finally, according to Infoline, the equity value of Multon (the bottling company operating in Russia under CCHBC) is estimated at 245 billion RUB or 2.68 billion euros (approximately 7.2 euros per share).
Citi estimates that the value of Russia is even greater, reaching up to 33% of earnings. Thus, following an 18% decline on the London Stock Exchange, it states that the stock could lose another 16% if it loses all operations, ultimately trimming its target price by 10.25 pounds, setting it at 40 pounds from 50.25 pounds or 47.86 euros.
The selloff on Nasdaq
The heavy selling of tech stocks on Thursday spilled over into the Athens Exchange, particularly during Friday session.
The FTSE 25 opened with heavy losses, with all stocks in the «red».
European markets also faced intense pressure.
The General Index lost 2.22%, and 2.51% on a weekly basis.
Third hit from Titan America
Yesterday, the stock of Titan Cement came under pressure for a second consecutive day. The pressure originated via the US, as the selloff also impacted subsidiary Titan America, which tumbled 18.32% on Thursday to close at 11.68 dollars.
On Friday it opened at an all-time low with further, though smaller, losses. Results from the US subsidiary fell short of expectations, while management guidance saw a slight downward revision. Significant price increases were also announced for the new year in the US to offset rising energy and transport costs. Residential demand remains weak, though sales are supported by infrastructure projects and data centers. Recently, however, following the midterm election results, investors have grown concerned about data center investments.
Early analyst reactions for the Greek-listed company suggest that the target set for 2026 EBITDA may need to be adjusted slightly lower. Over two trading sessions, the stock shed 7.23%.
Giorgos Katikas
georgekatikas@gmail.com
www.bankingnews.gr
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