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Coca-Cola (KO) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
BP (BP) closed the most recent trading day at $40.21, moving -1.18% from the previous trading session.

Coca-Cola (KO) closed the most recent trading day at $47.48, moving +0.42% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.16%. At the same time, the Dow added 0.42%, and the tech-heavy Nasdaq gained 0.03%.

Coming into today, shares of the world's largest beverage maker had gained 3.84% in the past month. In that same time, the Consumer Staples sector gained 3.46%, while the S&P 500 gained 2.89%.

KO will be looking to display strength as it nears its next earnings release, which is expected to be April 23, 2019. In that report, analysts expect KO to post earnings of $0.46 per share. This would mark a year-over-year decline of 2.13%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $7.89 billion, up 3.46% from the year-ago period.

KO's full-year Zacks Consensus Estimates are calling for earnings of $2.09 per share and revenue of $34.81 billion. These results would represent year-over-year changes of +0.48% and +9.26%, respectively.

Investors might also notice recent changes to analyst estimates for KO. 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 is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, KO is currently trading at a Forward P/E ratio of 22.61. This valuation marks a no noticeable deviation compared to its industry's average Forward P/E of 22.61.

We can also see that KO currently has a PEG ratio of 3.18. 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. The Beverages - Soft drinks industry currently had an average PEG ratio of 2.02 as of yesterday's close.

The Beverages - Soft drinks industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 217, putting it in the bottom 15% 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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