Coca-Cola Gears Up for Q4 Earnings Amid Market Challenges
The Coca-Cola Company (KO), based in Atlanta, Georgia, stands as a leader in the beverage industry, producing and selling a variety of nonalcoholic drinks globally. With a market capitalization of $267.3 billion, Coca-Cola also markets juice and juice-drink products to retailers and wholesalers around the world. The company is set to release its fiscal fourth-quarter earnings for 2024 before the market opens on Tuesday, February 11.
Analysts Predict Solid Earnings Growth
Before the earnings announcement, analysts forecast that KO will report a profit of $0.52 per share on a diluted basis, representing a 6.1% increase from $0.49 per share in the same quarter last year. Notably, the company has outperformed Wall Street’s earnings per share (EPS) estimates in its last four reports.
Year-End Projections Remain Positive
For the entire fiscal year, analysts expect KO to report an EPS of $2.85, up 6% from $2.69 in fiscal 2023. Looking ahead, its EPS is anticipated to rise by 3.9% year over year to reach $2.96 in fiscal 2025.
Stock Performance Lags Behind Market Standards
Over the past 52 weeks, KO stock has lagged, rising only 2.3% compared to the S&P 500’s 24.4% increase. The stock also underperformed the Consumer Staples Select Sector SPDR Fund’s (XLP) 4.7% growth during the same period.
Challenges Impacting Coca-Cola’s Growth
The reasons behind Coca-Cola’s lackluster performance include weak consumer demand in Europe, economic pressures, and fewer customers at convenience stores. The company also faces significant obstacles such as a lawsuit related to plastic pollution and accusations of deceptive practices. Additionally, soft sales across different segments and unfavorable currency fluctuations contribute to the company’s struggles. Broader economic issues, like rising costs, declining consumer spending, and geopolitical tensions, further threaten Coca-Cola’s profitability and investor confidence.
Recent Earnings Announcement Shows Small Gains
On October 30, KO shares slightly increased after the company announced its Q3 results. The adjusted EPS grew by 4.1% year over year to reach $0.77, while adjusted revenue totaled $11.9 billion, reflecting a minor increase compared to the previous year.
Analysts Remain Optimistic About Future Performance
Despite current challenges, analysts maintain a positive outlook on KO stock, giving it an overall “Strong Buy” rating. Out of 22 analysts, 17 recommend a “Strong Buy,” one suggests a “Moderate Buy,” and four advise holding the stock. The average analyst price target for KO is $73.86, indicating a potential upside of 19.6% from its current price.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For further details, please refer to the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily align with those of Nasdaq, Inc.
