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Coca-Cola (KO) Gains But Lags Market: What You Should Know

Zacks.com logo Zacks.com 4/15/2021

Coca-Cola (KO) closed the most recent trading day at $53.33, moving +0.47% from the previous trading session. This change lagged the S&P 500's 1.11% gain on the day.

Prior to today's trading, shares of the world's largest beverage maker had gained 3.65% over the past month. This has outpaced the Consumer Staples sector's gain of 2.79% and lagged the S&P 500's gain of 4.72% in that time.

KO will be looking to display strength as it nears its next earnings release, which is expected to be April 19, 2021. In that report, analysts expect KO to post earnings of $0.50 per share. This would mark a year-over-year decline of 1.96%. Meanwhile, our latest consensus estimate is calling for revenue of $8.47 billion, down 1.57% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.12 per share and revenue of $36.74 billion. These totals would mark changes of +8.72% and +11.29%, respectively, from last 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 such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.09% higher. KO is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, KO currently has a Forward P/E ratio of 25.07. This valuation marks a premium compared to its industry's average Forward P/E of 23.7.

Investors should also note that KO has a PEG ratio of 4.64 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Beverages - Soft drinks stocks are, on average, holding a PEG ratio of 2.86 based on yesterday's closing prices.

The Beverages - Soft drinks industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 66, which puts it in the top 26% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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