Coca-Cola Earnings Preview: Investors Brace for Impact as Coke Stays the Course

The Coca-Cola Company (KO) is gearing up to unveil its Q4 (Dec) results tomorrow before the market open, followed by an earnings call at 8:30 am ET. Analysts anticipate adjusted EPS growth of 9% yr/yr to $0.49 and a 6% increase in revenue to $10.67 billion. Known for its consistent dividend growth, Coca-Cola has maintained stability amidst market fluctuations.

Investor caution surrounds Coca-Cola's Q4 earnings in light of PepsiCo's (PEP) subdued performance last week, marked by a 2% decline in beverage volumes. Additionally, aluminum can maker Crown (CCK), a key supplier to Coca-Cola, experienced a sharp downturn due to downbeat FY24 guidance, citing softness in Europe and Asia.

While Coca-Cola demonstrated resilience in its Q3 report, achieving beats on both top and bottom lines and a 2% year-over-year growth in unit case volume, concerns persist regarding weak performance in North America, Asia Pacific, and EMEA. Consumer sentiment remains mixed globally, with shifts toward discount channels and private-label brands, particularly notable in Europe.

Despite these challenges, Coca-Cola maintains a positive outlook, projecting FY23 comparable EPS growth above consensus at +7-8% yr/yr. With lower market expectations following PepsiCo's Q4 results, Coca-Cola's performance in FY24 may be sufficient to buoy its shares above recent highs of $61.00, despite lacking a snack division like its competitor.

Coca-Cola's Q4 earnings will provide insight into its resilience amidst global economic headwinds. With its solid fundamentals and steady growth trajectory, Coca-Cola presents a compelling investment opportunity within the consumer staples sector.

$KO(KO)