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Coca-Cola Q4 Earnings Preview: What's Next for KO Stock?

Benjamin Rains

Shares of Coca-Cola KO have outpaced the broader beverage market over the past three years, including a 20% jump over the last 12 months. Now the question is what’s next for KO stock with the company set to report its fourth quarter fiscal 2019 financial results before the opening bell on Thursday, January 30?

Coca-Cola remains one of the most iconic brands in the world alongside the likes of Apple AAPL, Nike NKE, McDonald's MCD, and others. Despite its continued global superstardom, the company has expanded its non-sugary drink portfolio in recent years in order to adapt to changing consumer habits.  

The Atlanta-based company’s portfolio now includes UK-based Costa Coffee, along with an investment in Gatorade PEP challenger BodyArmor. Meanwhile, the firm has also rolled out tea and other drinks, and its Coke Zero Sugar and Coca-Cola Energy brands could prove to be hits for years. 

Looking ahead, Coca-Cola executives expect to post “at least 5%” growth in organic revenues in 2019, along with “at least 12% growth in comparable currency neutral net revenues (non-GAAP), including a 7% tailwind from acquisitions, divestitures and structural items.”

Our Zacks estimates call for its Q4 sales to surge 25.5%, which will be driven by acquisitions and divestitures. Meanwhile, KO’s adjusted Q4 earnings are projected to come in flat from the year-ago at $0.43 a share.

Coca-Cola is a Zacks Rank #2 (Buy) right now and its shares closed right near their 52-week highs Tuesday. With that said, KO’s valuation has grown stretched, which means a small post-earnings pullback might be in order.

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