Mixed Signals for Coca-Cola: Stock Performance vs. Industry Challenges
The Coca-Cola Company (KO), based in Atlanta, Georgia, remains a leading beverage manufacturer, marketing and selling a wide range of nonalcoholic beverages globally. With a market capitalization of $275.4 billion, the company also distributes juice and juice-drink products to retailers and wholesalers.
Coca-Cola’s Stock Struggles Amid Broader Market Gains
Over the past year, Coca-Cola’s stock has lagged behind the broader market. While KO shares have seen a 12% increase, the S&P 500 Index ($SPX) experienced a significant rally of nearly 36.8%. In 2024, KO’s stock continued its upward trend, rising by 8.5%, yet still fell short compared to the SPX’s 25.7% year-to-date gain.
Comparative Performance to Industry ETFs
Looking closer, KO has outperformed the First Trust Nasdaq Food & Beverage ETF (FTXG), which recorded an approximate gain of 4.6% over the past year. KO’s year-to-date performance surpassed the ETF’s slight losses during the same period.
Challenges in the European Market
Coca-Cola faces challenges in its European market, where weak consumer demand is affecting bottling operations. As a result, Euro-Pac partners have revised their sales forecasts downward. Economic pressures and declining foot traffic in convenience stores have further contributed to reduced demand. Additionally, the company is embroiled in a lawsuit in Los Angeles County over issues related to plastic pollution and alleged deceptive practices.
Recent Q3 Results and Future Outlook
On October 30, KO shares saw a slight increase after the release of its Q3 results, which showed a 4.1% year-over-year growth in adjusted EPS, reaching $0.77. The adjusted revenue of $11.9 billion also reflected a modest increase compared to the previous year.
For the current fiscal year, which ends in December, analysts project a 6% growth in KO’s EPS to $2.85 on a diluted basis. Remarkably, Coca-Cola has exceeded consensus estimates in each of the last four quarters.
Analyst Sentiment and Future Projections
Among the 21 analysts covering Coca-Cola stock, the consensus rating is a “Strong Buy,” with 15 “Strong Buy” ratings, one “Moderate Buy,” and five “Holds.”
Price Target Insights
This favorable sentiment has remained constant over the past three months. On October 25, Barclays PLC (BCS) maintained an “Overweight” rating on Coca-Cola but adjusted the price target to $73, indicating a potential upside of 14.2% from current levels. The average price target among analysts is $74.52, suggesting a 16.6% premium to KO’s current price. Furthermore, a Street-high target of $85 indicates upside potential of 33%.
More Stock Market News from Barchart
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 is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
