Atlanta, Georgia-based The Coca-Cola Company (KO) is a global beverage leader with a market cap of $295.9 billion. It manufactures and sells a wide range of non-alcoholic beverages, including sparkling soft drinks, flavored waters, sports drinks, coffees, teas, juices, value-added dairy products, plant-based beverages, and more.
This beverage giant has lagged behind the broader market over the past 52 weeks. Shares of KO have gained 1.1% over this time frame, while the broader S&P 500 Index ($SPX) has surged 17%. Nonetheless, on a YTD basis, the stock is up 9.9%, outpacing SPX’s 8.2.% return.
Zooming in further, Coca-Cola has outperformed the First Trust Nasdaq Food & Beverage ETF’s (FTXG) 7.6% downtick over the past 52 weeks and 2.4% loss on a YTD basis.
On Jul. 22, KO’s shares observed a marginal dip after its Q2 earnings release. The company’s revenue increased 1.4% year-over-year to $12.5 billion, primarily due to pricing actions in the marketplace and a favorable product mix. Moreover, expansion in both its adjusted gross and operating margins contributed to a 3.6% annual rise in its adjusted EPS to $0.87, which topped the consensus estimates by 4.8%. However, its overall unit case volumes declined from the year-ago quarter, as growth in Central Asia, Argentina, and China was more than offset by declines in Mexico, India, and Thailand, which may have lowered investor confidence.
For the current fiscal year, ending in December, analysts expect KO’s EPS to grow 3.5% year over year to $2.98. The company’s earnings surprise history is promising. It exceeded the consensus estimates in each of the last four quarters.
Among the 23 analysts covering the stock, the consensus rating is a “Strong Buy” which is based on 20 “Strong Buy,” two "Moderate Buy,” and one “Hold” rating.
The configuration has remained consistent over the past three months.
On Jul. 29, Robert Moskow from TD Cowen maintained a “Buy” rating on KO, with a price target of $82, indicating a 19.3% potential upside from the current levels.
The mean price target of $80 represents a 16.4% premium from KO’s current price levels, while the Street-high price target of $85 suggests an upside potential of 23.6%.
