Beverage giant Coca-Cola (KO) is slated to announce its 3Q17 results on October 25. On October 18, the company’s stock price rose 11.9% to $46.40 on a YTD (year-to-date) basis. Coca-Cola has been struggling to grow its top line in the past few quarters due to low soda volumes and structural changes.
Comparison with rivals
On October 18, the stock prices of Coca-Cola’s nonalcoholic beverage peers PepsiCo (PEP), Dr Pepper Snapple (DPS), and Monster Beverage (MNST) returned 7.0%, -1.7%, and 27.0%, respectively, since the start of 2017.
Except for Monster Beverage, the aforementioned nonalcoholic beverage stocks have underperformed the S&P 500 Index, which has risen 14.4% on a YTD basis.
The Consumer Staples Select Sector SPDR ETF (XLP) has risen 5.0% on a YTD basis. The XLP ETF has 25% exposure to beverage stocks.
Coca-Cola exceeded analysts’ revenue and earnings expectations in 2Q17. However, the company’s revenues and earnings declined on a year-over-year basis in 2Q17.
The company has a huge exposure to soda beverages. US soda volumes declined for the 12th consecutive year in 2016, reflecting persistent weakness in the soda beverage category.
In this series on Coca-Cola, we’ll discuss analysts’ expectations for the company’s 3Q17 revenues and earnings. We’ll also discuss the company’s volumes and valuation. We’ll also look into analysts’ recommendations for Coca-Cola stock.
The next part of this series will examine analysts’ estimates for Coca-Cola’s 3Q17 revenues.