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Coca-Cola’s Stock: Analysts Raise Target Prices after Q2 Earnings

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Dec. 4 2020, Updated 10:53 a.m. ET

Analyst ratings

As of July 26, about 37% or ten out of 27 analysts had a “buy” rating for Coca-Cola’s (KO) stock. The stock was rated “hold” by 59% or 16 analysts. The stock was rated “sell” by one analyst. Some analysts have revised their price target for Coca-Cola’s stock following its 2Q17 results, which were announced on July 26. As we discussed in the previous parts of this series, Coca-Cola exceeded analysts’ revenue and earnings estimates for 2Q17. However, both revenue and earnings continued to fall on a year-over-year basis in 2Q17.

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Price targets revised

Following the 2Q17 results, Credit Suisse raised its price target for Coca-Cola’s stock to $50 from $49. Jefferies raised its price target for the soda giant to $47 from $45. Morgan Stanley also raised its price target for Coca-Cola’s stock to $47 from $45. Independent Research cut its price target for Coca-Cola to $36 from $38. Independent Research has a “sell” rating on Coca-Cola’s stock.

As of July 26, the average 12-month price target for Coca-Cola’s stock was $46.68. This price target reflects an upside potential of about 2.1%. As we mentioned in Part 1 of this series, Coca-Cola’s stock has risen 10.3% on a YTD (year-to-date) basis.

Coca-Cola is a leading nonalcoholic beverage company with an extensive portfolio comprising over 500 brands sold in more than 200 countries. The company’s beverage portfolio includes 21 billion-dollar brands (generating $1 billion in annual retail sales). Of these 21, 19 brands are available in lower or no-sugar options to cater to the growing consumer need for healthier beverages.

The company is trying to boost its sales through continued innovation. Coca-Cola plans to launch 500 new products in 2017. Coca-Cola is also focusing on the expansion of its premium product portfolio in key markets. For instance, the company launched new premium-priced products in China under the Minute Maid Pulpy brand. These two new products are Minute Maid Triple Pulpy and Flower Flavors.

However, the company’s heavy exposure to carbonated soft drinks makes it more vulnerable to consumers’ shift from soda drinks to healthier beverages.

For more updates, visit Market Realist’s Nonalcoholic Beverage page.

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