Coca-Cola Shares Jump on Strong Q2 Results, Raised Guidance

Shares of Coca-Cola (KO) closed 1.3% higher on Wednesday and gained another 0.23% in the extended trading hours after the company reported strong second-quarter 2021 financial results. Coca-Cola’s product portfolio includes energy drinks, dairy and plant-based beverages, juices, sports drinks, soft drinks and water.

Net revenues grew 42% year-over-year to $10.1 billion, surpassing the Street’s estimates of $9.25 billion. The growth was driven by the recovery in COVID-19 pandemic-impacted markets. Adjusted earnings per share (EPS) increased 61% year-over-year to $0.68, beating analysts’ expectations of $0.55. (See Coca-Cola stock chart on TipRanks)

The Chairman and CEO of Coca-Cola, James Quincey, said, “Our results in the second quarter show how our business is rebounding faster than the overall economic recovery, led by our accelerated transformation. As a result, we are encouraged and, despite the asynchronous nature of the recovery, we are raising our full-year guidance.”

For 2021, Coca-Cola expects to report revenue growth of 12% to 14%, and adjusted EPS growth of 13% to 15% against $1.95 in 2020.

Following the announcement of the results, Cowen & Co. analyst Vivien Azer maintained a Neutral rating on the stock but raised the price target to $60 from $57 (6.1% upside potential). The analyst expects the company to increase its investment spending in the second half of the year.

Overall, the stock has a Moderate Buy consensus based on 6 Buys and 4 Holds. The average Coca-Cola price target of $61.20 implies 8.2% upside potential. The company’s shares have gained 16.7% over the past year.

According to TipRanks’ Smart Score rating system, Coca-Cola scores a “Perfect 10,” suggesting that the stock is likely to outperform market averages.

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