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Coca-Cola (KO) Stock Drops Despite Market Gains: Important Facts to Note

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The most recent trading session ended with Coca-Cola (KO - Free Report) standing at $71.40, reflecting a -0.07% shift from the previouse trading day's closing. This change lagged the S&P 500's daily gain of 0.4%. Elsewhere, the Dow saw an upswing of 0.62%, while the tech-heavy Nasdaq appreciated by 0.6%.

Shares of the world's largest beverage maker have depreciated by 0.42% over the course of the past month, underperforming the Consumer Staples sector's gain of 1.92% and the S&P 500's gain of 1.71%.

The investment community will be paying close attention to the earnings performance of Coca-Cola in its upcoming release. The company is slated to reveal its earnings on October 23, 2024. On that day, Coca-Cola is projected to report earnings of $0.75 per share, which would represent year-over-year growth of 1.35%. Meanwhile, our latest consensus estimate is calling for revenue of $11.65 billion, down 2.56% from the prior-year quarter.

KO's full-year Zacks Consensus Estimates are calling for earnings of $2.85 per share and revenue of $46.03 billion. These results would represent year-over-year changes of +5.95% and +0.61%, respectively.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Coca-Cola. These recent revisions tend to reflect the evolving nature of short-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.03% higher within the past month. Coca-Cola presently features a Zacks Rank of #2 (Buy).

Valuation is also important, so investors should note that Coca-Cola has a Forward P/E ratio of 25.08 right now. This denotes a premium relative to the industry's average Forward P/E of 19.53.

We can also see that KO currently has a PEG ratio of 3.95. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Beverages - Soft drinks industry had an average PEG ratio of 2.88 as trading concluded yesterday.

The Beverages - Soft drinks industry is part of the Consumer Staples sector. With its current Zacks Industry Rank of 156, this industry ranks in the bottom 39% of all industries, numbering over 250.

The Zacks Industry Rank is ordered 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.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.


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