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Coca-Cola (KO) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

Coca-Cola (KO) closed at $44.24 in the latest trading session, marking a -1.69% move from the prior day. This move lagged the S&P 500's daily loss of 1.6%. Meanwhile, the Dow lost 1.84%, and the Nasdaq, a tech-heavy index, lost 0.95%.

Coming into today, shares of the world's largest beverage maker had lost 19.53% in the past month. In that same time, the Consumer Staples sector lost 9.26%, while the S&P 500 lost 10.82%.

Investors will be hoping for strength from KO as it approaches its next earnings release. The company is expected to report EPS of $0.43, down 10.42% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $8.60 billion, up 7.26% from the year-ago period.

KO's full-year Zacks Consensus Estimates are calling for earnings of $2.10 per share and revenue of $37.13 billion. These results would represent year-over-year changes of -0.47% and +1.48%, respectively.

Investors might also notice recent changes to analyst estimates for KO. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 6.65% lower. KO currently has a Zacks Rank of #4 (Sell).

Investors should also note KO's current valuation metrics, including its Forward P/E ratio of 21.45. This valuation marks a premium compared to its industry's average Forward P/E of 16.03.

We can also see that KO currently has a PEG ratio of 3.48. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Beverages - Soft drinks industry currently had an average PEG ratio of 3.05 as of yesterday's close.

The Beverages - Soft drinks industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 95, which puts it in the top 38% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow KO in the coming trading sessions, be sure to utilize Zacks.com.

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