With a market cap of $272.8 billion, Coca-Cola Company (KO) dominates the non-alcoholic beverage industry through strong brand equity and innovation. Founded in 1886 and headquartered in Atlanta, Georgia, the company’s diverse portfolio spans sodas, energy drinks, and juices, mostly distributed by independent bottlers, and operates across multiple global segments.
Shares of the beverage giant have underperformed the broader market considerably over the past year. KO has soared marginally over this time frame, while the broader S&P 500 Index ($SPX) has rallied 28.9%. In 2024, Coca-Cola’s stock surged 7.5%, while $SPX rose 11.1% on a YTD basis.
Narrowing the focus, KO's price performance trails behind the S&P 500 Consumer Staples Select Sector SPDR Fund’s (XLP) 2.8% gain over the past year and 8.8% return on a YTD basis.
In 2023, Coca-Cola shares dropped 6.4% due to inflation pressuring consumers, a sluggish retail climate, and investors shifting from safe dividend stocks to higher-growth opportunities.
However, things are looking up for the soda behemoth in 2024. Coca-Cola's stock surged over 7% last month, reflecting its strong consumer loyalty and competitive advantages. Investor interest has also been piqued following the company's impressive Q1 earnings results on April 30 and the upward adjustment of its annual organic sales forecast between 8% and 9%. This revision is attributed to heightened consumer spending on premium sodas and juices.
For the current fiscal year, ending in December, Street expects KO’s EPS to rise 4.8% year over year to $2.82. Coca Cola’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
The consensus rating among the 19 analysts covering KO stock is a “Strong Buy.” That’s based on 13 “Strong Buy” ratings, one “Moderate Buy,” and five “Holds.”
This configuration is slightly more bullish than three months before, with 12 analysts advising a "Strong Buy."
Analysts at multiple brokerage firms raised their price targets for Coca-Cola after its Q1 earnings results. UBS Group maintained a "Buy" rating on the stock and raised the price target from $70 to $72, which is also the Street-high target price. This implies an upside potential of 13.7%.
Moreover, the mean price target of $66.41 suggests a 4.9% premium to KO from current levels.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
