Two to sell

Coca-Cola HBC

Shares

Coca-Cola HBC is a bottling partner of the soft drinks giant Coca-Cola. It has seen its share price slump in recent weeks due to a worsening outlook for earnings. Coca-Cola HBC is highly exposed to Russia and Ukraine, which together accounted for 36.2% of the group’s emerging markets sales volumes in 2021. Recent results were strong and the dividend payout target was raised to 40%-50%. However, the conflict in Ukraine has significantly weakened consumer confidence across eastern Europe, there are scant sales predicted in Ukraine itself, and the collapsing Russian rouble is looking to damage overall earnings. Large institutional investors are likely to begin selling their positions in the firm, which will put further pressure on the shares. 1,600p

WPP

Investors’ Chronicle This advertising giant has made a strong recovery from the pandemic. Organic revenue rose 12.1% last year and is now ahead of where it was in 2019. WPP posted a pre-tax profit of £951m, up from a pre-tax loss of £2.8bn in 2020 – although the latter was the result of a £2.82bn impairment it took to reflect concerns about the impact of the pandemic. That turned out to be unduly pessimistic: digital revenue soared as people stayed at home. But the outlook is darkening as global uncertainty returns. Energy costs are certain to rise and last year’s rapid growth in advertising spending will not be repeated. “If WPP thought it needed to take an impairment in 2020, it must be considering another in 2022.” Get out before it does. 998p