Coca-Cola (KO) Declines More Than Market: Some Information for Investors

Coca-Cola (KO) ended the recent trading session at $75.97, demonstrating a -2.08% change from the preceding day's closing price. The stock fell short of the S&P 500, which registered a loss of 1.36% for the day. Meanwhile, the Dow experienced a drop of 1.64%, and the technology-dominated Nasdaq saw a decrease of 1.46%.

Heading into today, shares of the world's largest beverage maker had lost 2.49% over the past month, outpacing the Consumer Staples sector's loss of 5.57% and lagging the S&P 500's loss of 1.76%.

Investors will be eagerly watching for the performance of Coca-Cola in its upcoming earnings disclosure. On that day, Coca-Cola is projected to report earnings of $0.81 per share, which would represent year-over-year growth of 10.96%. Meanwhile, our latest consensus estimate is calling for revenue of $12.32 billion, up 10.73% from the prior-year quarter.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $3.24 per share and a revenue of $49.66 billion, signifying shifts of +8% and +3.68%, respectively, from the last year.

It is also important to note the recent changes to analyst estimates for Coca-Cola. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. 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, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.16% higher within the past month. Coca-Cola currently has a Zacks Rank of #3 (Hold).

In terms of valuation, Coca-Cola is presently being traded at a Forward P/E ratio of 23.95. This represents a premium compared to its industry average Forward P/E of 18.27.

It's also important to note that KO currently trades at a PEG ratio of 3.24. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As the market closed yesterday, the Beverages - Soft drinks industry was having an average PEG ratio of 1.83.

The Beverages - Soft drinks industry is part of the Consumer Staples sector. At present, this industry carries a Zacks Industry Rank of 146, placing it within the bottom 41% of over 250 industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. 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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This article originally published on Zacks Investment Research (zacks.com).

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