In the latest trading session, Coca-Cola (KO) closed at $62.91, marking a -0.21% move from the previous day. This change was narrower than the S&P 500’s daily loss of 0.3%. At the same time, the Dow lost 0.2%, and the tech-heavy Nasdaq lost 0.1%.
Heading into today, shares of the world’s largest beverage maker had lost 2.54% over the past month, lagging the Consumer Staples sector’s loss of 0.06% and the S&P 500’s loss of 0.62% in that time.
Coca-Cola will be looking to display strength as it nears its next earnings release. On that day, Coca-Cola is projected to report earnings of $0.68 per share, which would represent no growth from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $10.83 billion, up 6.92% from the prior-year quarter.
KO’s full-year Zacks Consensus Estimates are calling for earnings of $2.47 per share and revenue of $42.1 billion. These results would represent year-over-year changes of +6.47% and +8.9%, respectively.
Any recent changes to analyst estimates for Coca-Cola should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, 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 moved 0.05% higher. Coca-Cola is holding a Zacks Rank of #2 (Buy) right now.
Looking at its valuation, Coca-Cola is holding a Forward P/E ratio of 25.56. Its industry sports an average Forward P/E of 21.14, so we one might conclude that Coca-Cola is trading at a premium comparatively.
Investors should also note that KO has a PEG ratio of 3.66 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. The Beverages – Soft drinks industry currently had an average PEG ratio of 2.88 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 165, putting it in the bottom 35% 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.
To follow KO in the coming trading sessions, be sure to utilize Zacks.com.
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