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Coca-Cola (KO) Gains But Lags Market: What You Should Know

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In the latest trading session, Coca-Cola (KO) closed at $45.49, marking a +1.29% move from the previous day. This change lagged the S&P 500's 2.15% gain on the day. Meanwhile, the Dow gained 2.17%, and the Nasdaq, a tech-heavy index, added 2.89%.

Heading into today, shares of the world's largest beverage maker had lost 3.04% over the past month, outpacing the Consumer Staples sector's loss of 4.89% and the S&P 500's loss of 5.16% in that time.

Investors will be hoping for strength from KO as it approaches its next earnings release, which is expected to be October 30, 2018. In that report, analysts expect KO to post earnings of $0.55 per share. This would mark year-over-year growth of 10%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8.23 billion, down 9.32% from the year-ago period.

KO's full-year Zacks Consensus Estimates are calling for earnings of $2.07 per share and revenue of $32.04 billion. These results would represent year-over-year changes of +8.38% and -9.51%, respectively.

Any recent changes to analyst estimates for KO should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

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. The Zacks Consensus EPS estimate has moved 0.05% lower within the past month. KO currently has a Zacks Rank of #4 (Sell).

Valuation is also important, so investors should note that KO has a Forward P/E ratio of 21.66 right now. This represents a discount compared to its industry's average Forward P/E of 22.17.

We can also see that KO currently has a PEG ratio of 2.83. 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. Beverages - Soft drinks stocks are, on average, holding a PEG ratio of 2.11 based on yesterday's closing prices.

The Beverages - Soft drinks industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 155, which puts it in the bottom 39% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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