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Should Coca-Cola Investors Hope for More Upside?

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Deutsche Bank initiates coverage

On December 14, 2017, Deutsche Bank initiated coverage of Coca-Cola (KO) with a “buy” rating. It assigned the stock a price target of $52. It also initiated coverage on Coca-Cola’s peers PepsiCo (PEP) and Dr Pepper Snapple (DPS), both with “buy” ratings. The “buy” rating for Coca-Cola stock was based on several factors, including the company’s efforts to venture into new beverage categories.

Prior to this, on November 14, 2017, Wells Fargo upgraded Coca-Cola stock to “outperform” from “market perform” and raised the price target to $51 from $45.

Current ratings and price target

As of December 15, 2017, Coca-Cola stock was rated a “hold” by 14 of the 27 analysts (or 52%) covering the stock. Twelve analysts gave it a “buy” rating, and one rated it a “sell.”

On December 15, 2017, JPMorgan lowered its price target for Coca-Cola to $48 from $49. As of that date, the 12-month average price target for KO was $48.70, which reflects an upside potential of 5.4%.

PepsiCo is rated a “buy” by 15 of the 25 analysts (or 60%) covering the stock and a “hold” by 40% of them. None of the analysts currently have a “sell” recommendation for PepsiCo. Dr Pepper Snapple has a “buy” rating from eight of the 21 analysts (or 38%) covering the stock. Twelve analysts have a “hold” rating on the stock, and one has rated it a “sell.”

Series overview

In this series, we’ll see what analysts expect from Coca-Cola’s revenue and earnings as well as the company’s strategies to improve its top line. We’ll also assess Coca-Cola’s returns compared to its peers. Let’s start by looking at Coca-Cola’s valuation.

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