Back to top

Image: Bigstock

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

Read MoreHide Full Article

Coca-Cola (KO - Free Report) closed the most recent trading day at $46.77, moving +1.02% from the previous trading session. This move lagged the S&P 500's daily gain of 1.9%. Meanwhile, the Dow gained 2.05%, and the Nasdaq, a tech-heavy index, added 1.75%.

Investors will be hoping for strength from KO as it approaches its next earnings release. On that day, KO is projected to report earnings of $0.43 per share, which would represent a year-over-year decline of 31.75%. Our most recent consensus estimate is calling for quarterly revenue of $7.61 billion, down 23.93% from the year-ago period.

KO's full-year Zacks Consensus Estimates are calling for earnings of $1.83 per share and revenue of $33.53 billion. These results would represent year-over-year changes of -13.27% and -8.37%, respectively.

Investors might also notice recent changes to analyst estimates for KO. These recent revisions tend to reflect the evolving nature of short-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. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. KO currently has a Zacks Rank of #4 (Sell).

Looking at its valuation, KO is holding a Forward P/E ratio of 25.33. This valuation marks a premium compared to its industry's average Forward P/E of 23.8.

Also, we should mention that KO has a PEG ratio of 5.27. 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. KO's industry had an average PEG ratio of 4.99 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 73, putting it in the top 29% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


CocaCola Company (The) (KO) - free report >>

Published in