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Coca-Cola (KO)
NYSE:KO

Coca-Cola (KO) AI Stock Analysis

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KO

Coca-Cola

(NYSE:KO)

Rating:76Outperform
Price Target:
$79.00
▲(13.28%Upside)
Coca-Cola's strong profitability and strategic initiatives make its stock appealing, but challenges in revenue growth and cash flow management, along with high leverage, pose risks. The robust earnings call and marketing strategies enhance its outlook, while technical indicators suggest caution in the short term.
Positive Factors
Acquisitions and Innovation
Strong growth from Coke's Fairlife acquisition supports analyst's view that KO can post sustained global topline growth.
Pricing Power
The market is missing Coke's much stronger pricing power than peers, which is proven by recent history, share gains, and solid execution.
Product Innovation
Innovation shift toward healthier products, including Coke Zero and zero-sugar products, plays a significant role in Coke's growth profile.
Negative Factors
Forex and Tax Headwinds
The key drag on EPS stems from forex headwinds and higher taxes due to global minimum tax regulations.
Tax and Interest Liability
The potential incremental tax and interest liability increased $400m, bringing the aggregate amount to ~$12.4b.
Tax Dispute Risk
A key risk includes uncertainty surrounding the IRS tax dispute appeal, which could take years to resolve.

Coca-Cola (KO) vs. SPDR S&P 500 ETF (SPY)

Coca-Cola Business Overview & Revenue Model

Company DescriptionThe Coca-Cola Company, headquartered in Atlanta, Georgia, is a leading global beverage corporation. It operates in the non-alcoholic beverage sector and is best known for producing the iconic Coca-Cola soft drink. The company offers a diverse portfolio of over 500 brands, including sparkling beverages, water, sports drinks, tea, juice, dairy, and plant-based options. With a presence in more than 200 countries, Coca-Cola's core operations involve manufacturing, distributing, and marketing beverage concentrates and syrups.
How the Company Makes MoneyCoca-Cola primarily generates revenue through the sale of beverage concentrates and syrups to authorized bottling partners who manufacture, package, and distribute the final products to retailers and consumers. This franchised bottling system allows Coca-Cola to leverage its brand and marketing expertise while bottlers handle production and distribution logistics. Additionally, Coca-Cola earns revenue from direct sales of finished beverages to retailers, restaurants, and other outlets. Strategic partnerships and joint ventures, such as those with McDonald's and other major chains, further enhance its market presence and drive sales. The company's earnings are also bolstered by continuous innovation in product offerings and expansion into emerging markets, increasing brand visibility and consumer reach.

Coca-Cola Key Performance Indicators (KPIs)

Any
Any
Revenue by Segment
Revenue by Segment
Analyzes income from different business units, highlighting which product lines or services are driving sales and where there might be opportunities or challenges.
Chart InsightsCoca-Cola's North America segment shows robust revenue growth despite recent volume challenges, driven by strategic marketing and price mix improvements. The Asia-Pacific region continues to excel, contributing significantly to overall performance. However, Bottling Investments are declining, reflecting potential operational inefficiencies. The latest earnings call highlights a 6% organic revenue growth and margin expansion, with strategic focus on affordability and local relevance. While geopolitical tensions and misinformation pose risks, the company remains optimistic about achieving its 2025 guidance through targeted initiatives.
Data provided by:Main Street Data

Coca-Cola Earnings Call Summary

Earnings Call Date:Apr 29, 2025
(Q1-2025)
|
% Change Since: -2.16%|
Next Earnings Date:Jul 22, 2025
Earnings Call Sentiment Positive
Coca-Cola continues to demonstrate resilience with strong organic revenue growth and margin expansion. While there are challenges in specific markets and segments, strategic actions and marketing efforts show promise for overcoming these obstacles. The company's strategy and execution provide a strong foundation for future growth.
Q1-2025 Updates
Positive Updates
Strong Organic Revenue Growth
Coca-Cola reported a 6% organic revenue growth for the first quarter, at the high end of their long-term growth algorithm.
Gross and Operating Margin Expansion
The company achieved a 30 basis point increase in comparable gross margin and a 130 basis point increase in comparable operating margin.
Successful Marketing Campaigns
Integrated marketing campaigns, such as the Everyday Tasty Celebrations and Share a Coke, contributed to strong brand performance.
Strong Performance in Asia-Pacific
The Asia-Pacific region delivered volume growth with notable performances in India and China.
Fairlife Continues to Excel
Fairlife was the number one brand in retail dollar growth during the quarter, contributing significantly to the company's success.
Negative Updates
Volume Challenges in North America
North America faced volume challenges due to factors like consumer sentiment, severe weather, and calendar shifts.
Weakness in Mexico
Volume in Mexico was weaker due to geopolitical tensions and a shift in Easter timing.
Impact of False Information
The company faced challenges from misinformation that affected consumer sentiment, particularly in Southern U.S. states.
Company Guidance
During The Coca-Cola Company's First Quarter 2025 Earnings Results Conference Call, the company announced several key metrics and guidance for the year. The company reported a 2% increase in volume growth and organic revenue growth at the high end of its long-term growth algorithm. Comparable gross and operating margins expanded during the quarter. Despite macroeconomic uncertainties and geopolitical tensions in certain markets, Coca-Cola achieved a 6% growth in organic revenues, with a price mix growth of 5%. For 2025, Coca-Cola expects organic revenue growth of 5% to 6% and comparable currency-neutral earnings per share growth of 7% to 9%. The company acknowledged challenges in certain markets, such as Mexico and the U.S., but expressed confidence in achieving its full-year guidance by focusing on affordability, local relevance, and strategic marketing initiatives.

Coca-Cola Financial Statement Overview

Summary
Coca-Cola exhibits strong profitability and operational efficiency with high profit margins and a robust ROE. Nonetheless, challenges persist with declining revenue growth and cash flow generation, which could impact liquidity. The balance sheet is stable, but high leverage needs careful monitoring.
Income Statement
85
Very Positive
Coca-Cola's income statement reflects strong profitability with a stable gross profit margin of approximately 61% over the TTM period. The net profit margin remains robust at 23%, indicating efficient cost management. However, revenue growth is slightly negative at -0.4% TTM, suggesting a stabilization in top-line growth. Despite this, the company maintains high EBIT and EBITDA margins of 24.5% and 31.9%, respectively, underscoring its operational efficiency.
Balance Sheet
78
Positive
The balance sheet shows a healthy equity ratio of 25.8%, reflecting a solid capital structure. However, the debt-to-equity ratio stands at 1.87, indicating relatively high leverage, which may pose risks if not managed prudently. Return on equity is strong at 41.1%, suggesting effective use of shareholder funds to generate profits.
Cash Flow
70
Positive
Cash flow analysis reveals a significant decline in free cash flow growth, with the most recent TTM period showing a negative free cash flow of -$928 million. The operating cash flow to net income ratio is low at 0.1, which may indicate challenges in converting earnings into cash. The free cash flow to net income ratio is also concerning at -0.086, suggesting potential liquidity issues.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
46.89B47.06B45.75B43.00B38.66B33.01B
Gross Profit
28.64B28.74B27.23B25.00B23.30B19.58B
EBIT
11.51B9.99B11.31B10.91B10.31B9.00B
EBITDA
16.01B15.81B15.62B13.81B14.54B12.66B
Net Income Common Stockholders
10.78B10.63B10.71B9.54B9.77B7.75B
Balance SheetCash, Cash Equivalents and Short-Term Investments
12.00B12.85B13.66B11.63B12.63B10.91B
Total Assets
101.72B100.55B97.70B92.76B94.35B87.30B
Total Debt
49.11B44.52B42.06B39.15B42.76B42.79B
Net Debt
40.69B33.69B32.70B29.63B33.08B36.00B
Total Liabilities
73.96B74.18B70.22B66.94B69.49B66.01B
Stockholders Equity
26.20B24.86B25.94B24.11B23.00B19.30B
Cash FlowFree Cash Flow
-928.00M4.74B9.75B9.53B11.26B8.67B
Operating Cash Flow
1.07B6.80B11.60B11.02B12.63B9.84B
Investing Cash Flow
1.13B2.52B-3.35B-763.00M-2.77B-1.48B
Financing Cash Flow
-3.88B-6.91B-8.31B-10.25B-6.79B-8.07B

Coca-Cola Technical Analysis

Technical Analysis Sentiment
Positive
Last Price69.74
Price Trends
50DMA
71.01
Negative
100DMA
69.59
Positive
200DMA
67.10
Positive
Market Momentum
MACD
-0.32
Positive
RSI
43.92
Neutral
STOCH
9.82
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KO, the sentiment is Positive. The current price of 69.74 is below the 20-day moving average (MA) of 70.77, below the 50-day MA of 71.01, and above the 200-day MA of 67.10, indicating a neutral trend. The MACD of -0.32 indicates Positive momentum. The RSI at 43.92 is Neutral, neither overbought nor oversold. The STOCH value of 9.82 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KO.

Coca-Cola Risk Analysis

Coca-Cola disclosed 42 risk factors in its most recent earnings report. Coca-Cola reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Coca-Cola Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$42.65B27.7617.43%1.90%11.73%-15.34%
KOKO
76
Outperform
$296.31B27.5640.98%2.96%1.15%0.28%
76
Outperform
$61.53B41.6520.00%1.47%-4.87%
PEPEP
73
Outperform
$176.97B18.9850.06%4.41%-0.38%2.23%
KDKDP
71
Outperform
$45.61B30.426.13%2.74%3.95%-28.73%
69
Neutral
$9.34B18.6336.83%0.93%3.21%31.84%
65
Neutral
$26.93B14.96-6.25%3.23%0.98%2.67%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
KO
Coca-Cola
69.74
7.59
12.21%
COKE
Coca-Cola Bottling Co Consolidated
108.64
5.96
5.80%
KDP
Keurig Dr Pepper
33.26
-0.50
-1.48%
MNST
Monster Beverage
63.21
13.72
27.72%
PEP
PepsiCo
129.09
-33.08
-20.40%
CCEP
Coca-Cola Europacific Partners
92.99
19.08
25.82%

Coca-Cola Corporate Events

Business Operations and Strategy
Coca-Cola Streamlines Operations with Segment Reorganization
Positive
Mar 27, 2025

On January 1, 2025, Coca-Cola streamlined its operations by discontinuing its Global Ventures segment, integrating Costa, innocent, and doğadan into the Europe, Middle East, and Africa segment, while Costa’s ready-to-drink business and Monster-related fees were allocated to relevant geographic segments. This organizational change aims to simplify Coca-Cola’s structure without affecting previously reported financial results, potentially enhancing operational efficiency and focus.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.