Technology

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

Coca-Cola (KO) closed the most recent trading day at $46.49, moving +0.67% from the previous trading session. This change outpaced the S&P 500's 0.21% gain on the day. Elsewhere, the Dow gained 0.64%, while the tech-heavy Nasdaq lost 0.05%.

Prior to today's trading, shares of the world's largest beverage maker had gained 1.61% over the past month. This has lagged the Consumer Staples sector's gain of 2.28% and the S&P 500's gain of 2.57% in that time.

Wall Street will be looking for positivity from KO as it approaches its next earnings report date. This is expected to be April 23, 2019. On that day, KO is projected to report earnings of $0.46 per share, which would represent a year-over-year decline of 2.13%. Meanwhile, our latest consensus estimate is calling for revenue of $7.89 billion, up 3.42% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.09 per share and revenue of $34.81 billion, which would represent changes of +0.48% and +9.27%, respectively, from the prior 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 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. 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. Within the past 30 days, our consensus EPS projection has moved 0.05% lower. KO is currently sporting a Zacks Rank of #4 (Sell).

Digging into valuation, KO currently has a Forward P/E ratio of 22.08. This represents a discount compared to its industry's average Forward P/E of 22.1.

Investors should also note that KO has a PEG ratio of 3.11 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. KO's industry had an average PEG ratio of 2.16 as of yesterday's close.

The Beverages - Soft drinks industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 228, putting it in the bottom 11% 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.

To follow KO in the coming trading sessions, be sure to utilize Zacks.com.


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

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