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54% of Analysts Rate Coca-Cola as a ‘Buy’ before Its Q3 Results

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Oct. 26 2018, Updated 1:01 p.m. ET

Current recommendations

Coca-Cola (KO) stock received “buy” recommendations from 14 of the 26 analysts (~54.0%) covering its stock. KO stock received “hold” recommendations from 12 analysts, and there were no “sell” ratings.

On October 16, Morgan Stanley raised its target price for Coca-Cola stock to $50.00 from $49.00. On September 13, Guggenheim initiated coverage of Coca-Cola stock with a “buy” rating and a target price of $51.00.

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Growth strategy

Coca-Cola (KO) has a massive product portfolio, which includes 21 brands that generate more than $1.0 billion in retail sales. The beverage giant has a strong distribution network with a presence in more than 200 markets. The company is working to improve its soda business by innovating low- or no-sugar options. Coca-Cola is also working to improve its sales through higher pricing and by promoting high-margin small packages.

Coca-Cola has a leading position in the soda beverage market and is looking to strengthen its market share in the still beverage space. The company is growing its presence in categories such as coffee and tea, bottled water, and functional beverages through innovation and strategic acquisitions, which we discussed earlier in this series.

To improve its profitability, Coca-Cola has been streamlining its operations to improve its productivity. The company’s refranchising efforts have reduced its exposure to the low-margin bottling operations, boosting its margins.

12-month target price

On October 24, the 12-month average target price for Coca-Cola (KO) stock was $50.93. This price estimate reflects a potential upside of ~9.0%. Coca-Cola stock has risen 1.9% on a year-to-date basis.

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