Exane starts Coca-Cola with Outperform, names top beverage pick

Exane BNP Paribas initiated coverage of Coca-Cola with an Outperform rating and $72 price target. The firm names Coca-Cola its top pick in the beverage group. The company’s earnings per share have been stuck in the $2 range from 2011 to 2020, but this will change given its market share momentum, “much improved” earnings delivery, “enhanced” financial profile and “emerging return-of-capital story,” the analyst tells investors in a research note. Exane sees “massive” growth potential for Coca-Cola outside of the U.S. and views the stock’s current valuation as “compelling,” even with a “likely unfavorable” outcome from the Internal Revenue Service lawsuit.