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

Zacks Equity Research

Coca-Cola (KO) closed the most recent trading day at $54.17, moving -0.24% from the previous trading session. This change lagged the S&P 500's daily gain of 0.62%. Meanwhile, the Dow gained 0.61%, and the Nasdaq, a tech-heavy index, added 1.05%.

Coming into today, shares of the world's largest beverage maker had lost 0.77% in the past month. In that same time, the Consumer Staples sector gained 1.35%, while the S&P 500 gained 3.85%.

KO will be looking to display strength as it nears its next earnings release, which is expected to be October 18, 2019. In that report, analysts expect KO to post earnings of $0.56 per share. This would mark a year-over-year decline of 3.45%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $9.52 billion, up 15.46% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.10 per share and revenue of $36.85 billion. These totals would mark changes of +0.96% and +15.68%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for KO. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 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 remained stagnant. KO is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note KO's current valuation metrics, including its Forward P/E ratio of 25.81. For comparison, its industry has an average Forward P/E of 21.7, which means KO is trading at a premium to the group.

We can also see that KO currently has a PEG ratio of 3.78. 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 was holding an average PEG ratio of 2.65 at yesterday's closing price.

The Beverages - Soft drinks industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 187, putting it in the bottom 27% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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Coca-Cola Company (The) (KO) : Free Stock Analysis Report
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