{"id":5976,"date":"2023-10-27T13:20:45","date_gmt":"2023-10-27T13:20:45","guid":{"rendered":"https:\/\/infundpros.com\/markets\/whats-next-for-coca-cola-stock-after-4-gains-in-a-week-amid-q3-beat\/"},"modified":"2023-10-27T13:20:46","modified_gmt":"2023-10-27T13:20:46","slug":"whats-next-for-coca-cola-stock-after-4-gains-in-a-week-amid-q3-beat","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=5976","title":{"rendered":"What\u2019s Next For Coca-Cola Stock After 4% Gains In A Week Amid Q3 Beat?"},"content":{"rendered":"
\n

Coca-Cola<\/strong>
\n KO
\n <\/fbs-ticker> (NYSE: KO) recently reported its Q3 results, with revenues and earnings beating our estimates. KO stock is trading at 5.5x sales compared to the last five-year average of 6.8x, and we believe investors will likely be better off picking Coca-Cola for robust gains in the long run.<\/p>\n

The company reported revenue of $12.0 billion, reflecting 8% growth from the prior year period and above our estimate of $11.5 billion. Its adjusted earnings of $0.74 per share were up 7% y-o-y and above our estimated $0.70 figure. In this note, we discuss Coca-Cola\u2019s stock performance, key takeaways from its recent results, and valuation.<\/p>\n

KO stock has seen little change, moving slightly from levels of $55 in early January 2021 to around $55 now, vs. an increase of about 10% for the S&P 500 over this roughly 3-year period. Overall, the performance of KO stock with respect to the index has been lackluster. Returns for the stock were 8% in 2021, 7% in 2022, and -12% in 2023. In comparison, returns for the S&P 500 have been 27% in 2021, -19% in 2022, and 9% in 2023 – indicating that KO underperformed the S&P<\/strong> in 2021 and 2023.<\/p>\n

In fact, consistently beating the S&P 500<\/strong> – in good times and bad – has been difficult over recent years for individual stocks; for heavyweights in the Consumer Staples sector, including WMT, PG, and COST, and even for the megacap stars GOOG, TSLA, and MSFT.<\/p>\n

<\/fbs-ad><\/p>\n

In contrast, the Trefis High Quality Portfolio, with a collection of 30 stocks, has outperformed the S&P 500 each year<\/strong> over the same period. Why is that?<\/strong> As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index, less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.<\/p>\n

Given the current uncertain macroeconomic environment with high oil prices and elevated interest rates, could KO face a similar situation as it did in 2021 and 2023 and underperform the S&P<\/strong> over the next 12 months – or will it see a strong jump? From a valuation perspective, KO stock looks like it has ample room for growth. We estimate Coca-Cola\u2019s Valuation<\/strong> to be $67 per share, reflecting around 20% upside from its current levels of $56. Our forecast is based on a 25x P\/E multiple for KO and expected earnings of $2.67 on a per-share and adjusted basis for the full year 2023. The 25x P\/E aligns with the stock\u2019s last four-year average. The company raised its earnings outlook to now be in the range of $2.65 and $2.68 (vs. the $2.60 and $2.63 range earlier).<\/p>\n

Coca-Cola\u2019s revenue of $12.0 billion in Q3 was up 8% y-o-y. Sales were up 11% organically, led by a 9% rise in price\/mix and a 2% growth in concentrate sales. The company is seeing more traction in the away-from-home business than at-home beverages. Coca-Cola saw its adjusted operating margin expand 20 bps y-o-y to 29.7% in Q3, vs. 29.5% in the year-ago period. Higher revenues and margin expansion, partly offset by a slightly higher effective tax rate, led to a 7% y-o-y rise in the bottom line to $0.74 on a per-share and adjusted basis in Q3\u201923.<\/p>\n

While KO stock looks like it has ample room for growth, it is helpful to see how Coca-Cola\u2019s Peers<\/strong> fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons<\/strong>.<\/strong><\/p>\n

Invest with Trefis <\/strong>Market Beating Portfolios<\/strong><\/p>\n

See all Trefis <\/strong>Price Estimates<\/strong><\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Coca-Cola KO (NYSE: KO) recently reported its Q3 results, with revenues and earnings beating our estimates. KO stock is trading at 5.5x…<\/p>\n","protected":false},"author":1,"featured_media":5977,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25],"tags":[],"class_list":{"0":"post-5976","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets"},"yoast_head":"\nWhat\u2019s Next For Coca-Cola Stock After 4% Gains In A Week Amid Q3 Beat? | inFundPros<\/title>\n<meta name=\"description\" content=\"Coca-Cola KO (NYSE: KO) recently reported its Q3 results, with revenues and earnings beating our estimates. 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