Coca-Cola (KO) Dips More Than Broader Markets: What You Should Know

·3 min read

Coca-Cola (KO) closed the most recent trading day at $55.41, moving -0.25% from the previous trading session. This move lagged the S&P 500's daily loss of 0.2%.

Prior to today's trading, shares of the world's largest beverage maker had gained 1.67% over the past month. This has outpaced the Consumer Staples sector's gain of 1.12% and lagged the S&P 500's gain of 2.11% in that time.

Wall Street will be looking for positivity from KO as it approaches its next earnings report date. In that report, analysts expect KO to post earnings of $0.55 per share. This would mark year-over-year growth of 30.95%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $9.4 billion, up 31.53% from the year-ago period.

KO's full-year Zacks Consensus Estimates are calling for earnings of $2.19 per share and revenue of $37.14 billion. These results would represent year-over-year changes of +12.31% and +12.51%, respectively.

It is also important to note the 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.

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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.27% higher. KO is currently a Zacks Rank #3 (Hold).

In terms of valuation, KO is currently trading at a Forward P/E ratio of 25.38. For comparison, its industry has an average Forward P/E of 23.05, which means KO is trading at a premium to the group.

Investors should also note that KO has a PEG ratio of 3.34 right now. 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 2.7 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 127, which puts it in the top 50% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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