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

·3 min read

Coca-Cola (KO) closed the most recent trading day at $60.79, moving +0.53% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.34%. Elsewhere, the Dow gained 0.1%, while the tech-heavy Nasdaq lost 0.05%.

Prior to today's trading, shares of the world's largest beverage maker had lost 7.01% over the past month. This has lagged the Consumer Staples sector's loss of 5.28% and was narrower than the S&P 500's loss of 7.95% in that time.

Wall Street will be looking for positivity from Coca-Cola as it approaches its next earnings report date. The company is expected to report EPS of $0.64, down 1.54% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $10.62 billion, up 5.79% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.46 per share and revenue of $42.42 billion. These totals would mark changes of +6.03% and +9.75%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Coca-Cola. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.13% higher. Coca-Cola is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note Coca-Cola's current valuation metrics, including its Forward P/E ratio of 24.54. For comparison, its industry has an average Forward P/E of 24.54, which means Coca-Cola is trading at a no noticeable deviation to the group.

Also, we should mention that KO has a PEG ratio of 3.82. 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 3.18 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 89, which puts it in the top 36% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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