Coca-Cola Set to Release Q3 2024 Results Amid Mixed Financial Trends

Coca-Cola (NYSE: KO) will announce its Q3 2024 earnings on Wednesday, October 23. The company is projected to generate revenues of $11.65 billion, slightly higher than the consensus estimate of $11.6 billion. However, this figure represents approximately a 2.5% decrease from the previous year. Anticipated earnings are approximately $0.75 per share, which is slightly above last year’s $0.74. For further analysis of Coca-Cola’s financial trends, refer to our interactive dashboard on the Coca-Cola FY 2024 Q3 Earnings Preview.

Trends Influencing Coca-Cola’s Financials

Coca-Cola is likely to benefit from increased pricing and product mix, particularly in developing markets where inflation has heightened prices. This trend is expected to bolster growth for sales both at home and in restaurants and stores. Strong demand for products such as juice, value-added dairy, and plant-based drinks is also anticipated to boost volume. Nevertheless, foreign exchange impacts could contribute to a decline in reported sales figures. On a more positive note, profitability may improve through refranchising its bottling operations, although revenues are predicted to fall by 2.5%.

A Look Back at Q2 2024 Performance

In the previous quarter, Coca-Cola’s revenue reached $12.4 billion, reflecting a 3% increase on a reported basis. When adjusted for organic growth, sales surged by 15%, driven by a 9% increase in pricing and a 6% rise in concentrate sales. The regions of Europe, the Middle East, Africa, and Latin America experienced organic growth exceeding 20%. Additionally, Coca-Cola’s operating margin improved by 120 basis points year-over-year, reaching 32.8% in Q2, while the net earnings rose by 7% to $0.84.

Coca-Cola’s Market Valuation

Regarding valuation, we estimate Coca-Cola’s stock to be worth $69 per share, which is close to its current trading price. This evaluation relies on a 24x price-to-earnings (P/E) ratio and anticipated earnings of $2.86 per share for the full year 2024. This multiple is consistent with the stock’s average P/E ratio over the past five years.

Stock Performance Compared to the Market

This year, KO shares have climbed by 21%, aligning closely with the S&P 500 index’s increase of 23%. In a broader context, KO stock exhibited less volatility over a longer timeframe compared to the S&P 500. Similarly, the Trefis High Quality (HQ) Portfolio, which comprises 30 stocks, has consistently outperformed the S&P 500 annually. The HQ Portfolio has demonstrated superior returns with lower risk compared to the benchmark index, highlighting its stable performance.

Peer Comparison and Conclusion

While Coca-Cola appears to be appropriately priced in its current market context, exploring how Coca-Cola’s peers perform on key metrics may offer useful comparisons. Valuable insights can be found in the Peer Comparisons section.

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