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

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Coca-Cola (KO) closed the most recent trading day at $55.86, moving -0.99% from the previous trading session. This change lagged the S&P 500's daily loss of 0.46%.

Prior to today's trading, shares of the world's largest beverage maker had lost 0.55% over the past month. This has lagged the Consumer Staples sector's gain of 0.37% and the S&P 500's gain of 1.93% in that time.

KO will be looking to display strength as it nears its next earnings release. In that report, analysts expect KO to post earnings of $0.58 per share. This would mark year-over-year growth of 5.45%. Our most recent consensus estimate is calling for quarterly revenue of $9.63 billion, up 11.3% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.25 per share and revenue of $37.86 billion. These totals would mark changes of +15.38% and +14.69%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for KO. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.22% higher. KO currently has a Zacks Rank of #2 (Buy).

Valuation is also important, so investors should note that KO has a Forward P/E ratio of 25.08 right now. Its industry sports an average Forward P/E of 24.14, so we one might conclude that KO is trading at a premium comparatively.

Investors should also note that KO has a PEG ratio of 2.89 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. KO's industry had an average PEG ratio of 2.51 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 118, which puts it in the top 47% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. 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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