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Coca-Cola (KO) Ascends While Market Falls: Some Facts to Note

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Coca-Cola (KO - Free Report) ended the recent trading session at $71.75, demonstrating a +0.35% swing from the preceding day's closing price. This change outpaced the S&P 500's 0.6% loss on the day. Elsewhere, the Dow lost 0.39%, while the tech-heavy Nasdaq lost 1.12%.

Prior to today's trading, shares of the world's largest beverage maker had gained 5.64% over the past month. This has outpaced the Consumer Staples sector's gain of 3.14% and the S&P 500's gain of 3.15% in that time.

The investment community will be paying close attention to the earnings performance of Coca-Cola in its upcoming release. The company is expected to report EPS of $0.75, up 1.35% from the prior-year quarter. In the meantime, our current consensus estimate forecasts the revenue to be $11.65 billion, indicating a 2.56% decline compared to the corresponding quarter of the prior year.

KO's full-year Zacks Consensus Estimates are calling for earnings of $2.85 per share and revenue of $46.01 billion. These results would represent year-over-year changes of +5.95% and +0.55%, respectively.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Coca-Cola. These revisions help to show the ever-changing nature of near-term business trends. 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. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.01% upward. Right now, Coca-Cola possesses a Zacks Rank of #3 (Hold).

In the context of valuation, Coca-Cola is at present trading with a Forward P/E ratio of 25.11. This represents a premium compared to its industry's average Forward P/E of 19.5.

We can also see that KO currently has a PEG ratio of 4. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. KO's industry had an average PEG ratio of 2.89 as of yesterday's close.

The Beverages - Soft drinks industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 211, putting it in the bottom 17% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow KO in the coming trading sessions, be sure to utilize Zacks.com.


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