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Wait, the Coca-Cola Comeback Is Finally Here?!?!


Coca-Cola  (KO) didn't have the best 2017, but some analysts are getting more positive, especially factoring in l ower corporate taxes.

ON-CJ634_cocaco_D_20171228090218.jpg Bloomberg News

Evercore ISI's Robert Ottenstein and Theo Brito are in the bull camp. They upgraded Coke to Outperform, with a $55 price target, arguing that after suffering through the demonization of sugar, increasing taxes on sodas, and seven years of no earnings growth, the worst is already baked into the stock.

Ottenstein and Brito believe that after years of underperformance, Coke finally looks poised to deliver multi-year outperformance, relative to the Consumer Staples Select Sector SPDR ETF  (XLP) and maybe even the S&P 500.

They see Coke resuming earnings growth in 2018, with upside to consensus estimates through 2020. In addition, they argue that Coke's valuation can expand, especially if inflation pick up.

Of course, they caution that in a cyclically-driven market, Coke may lag and their call may take some time to come to fruition. But overall,  they're upbeat as the macro backdrop looks supportive and Coke is reaching the finish line with its global refranchising program.

Shares of Coke are up 0.4% to $46.24 in recent trading.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , US Markets
Referenced Symbols: KO , XLP


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