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

Zacks Equity Research

Coca-Cola (KO) closed the most recent trading day at $47.97, moving +1.46% from the previous trading session. This move outpaced the S&P 500's daily gain of 1%. Meanwhile, the Dow gained 1.35%, and the Nasdaq, a tech-heavy index, added 0.6%.

Coming into today, shares of the world's largest beverage maker had lost 2.07% in the past month. In that same time, the Consumer Staples sector gained 3.61%, while the S&P 500 gained 4.48%.

KO will be looking to display strength as it nears its next earnings release. On that day, KO is projected to report earnings of $0.45 per share, which would represent a year-over-year decline of 19.64%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8.36 billion, down 12.07% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.80 per share and revenue of $32.98 billion. These totals would mark changes of -14.69% and -9.86%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for KO. These revisions help to show the ever-changing nature of near-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. 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. The Zacks Consensus EPS estimate has moved 0.07% higher within the past month. KO is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that KO has a Forward P/E ratio of 26.3 right now. This valuation marks a premium compared to its industry's average Forward P/E of 22.4.

Meanwhile, KO's PEG ratio is currently 5.47. 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. KO's industry had an average PEG ratio of 4.56 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 189, which puts it in the bottom 26% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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Zacks Investment Research