Coca-Cola Stock Surges on Strong Earnings and Bullish Outlook

Coca-Cola (KO) shares surged on Tuesday, February 11, 2025, following the company's release of strong fourth-quarter earnings and a bullish outlook for 2025. The stock price climbed nearly 4% in premarket trading, driven by better-than-expected organic growth and management's commitment to investing in marketing to drive long-term growth.

Coca-Cola reported adjusted earnings per share of $0.55, 3 cents or 6% above the average forecast on Wall Street. Revenue of $11.5 billion showed annual growth nearing 7% and was $800 million ahead of the Street’s consensus. Adjusted organic revenues expanded 14% from a year earlier, while global unit case volume rose 2%, reversing last quarter's decline.

The company's strong performance was driven by a 14% increase in adjusted organic revenues, which was largely fueled by higher prices. Coca-Cola's pricing rose 9% in the quarter, 4% of which came from markets dealing with hyperinflation. The rest came from price hikes and "favorable mix," meaning that customers bought products that were more expensive. While most of Coca-Cola's organic revenue growth came from pricing, the company did see higher demand, unlike many consumer companies including rival PepsiCo.

Coca-Cola's sparkling soft drinks segment, which includes its namesake soda, saw volume rise 2% in the quarter. Coca-Cola Zero Sugar's volume climbed 13% during the period. The company's water, sports, coffee, and tea division reported 2% volume growth, while its juice, value-added dairy, and plant-based beverages division saw volume shrink 1%.

Looking to 2025, Coca-Cola projects organic revenue will grow 5% to 6%. The company also expects comparable earnings per share will rise 2% to 3%, which includes a 6% to 7% headwind from currency exchange and a slight headwind from acquisitions, divestitures, and structural changes.

Coca-Cola's strong earnings and bullish outlook have contributed to a positive investor sentiment, reflected in the stock's performance and analyst ratings. According to 17 analysts, the average rating for KO stock is "Strong Buy," with a 12-month stock price forecast of $72.18, an increase of 6.76% from the latest price.

Coca-Cola's commitment to investing in marketing to drive long-term growth, coupled with its strong financial performance, has contributed to the stock's recent surge. As the company continues to execute on its strategy, investors can expect Coca-Cola to maintain its momentum and deliver shareholder value.