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Analysts Lower Price Target on Coca-Cola Stock after Q4 Results

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Feb. 19 2019, Published 8:57 a.m. ET

Reaction to Q4 results

Some analysts lowered their price target on Coca-Cola (KO) stock after the company announced lower-than-expected guidance for 2019 last week. Coca-Cola, which announced its fourth-quarter results on February 14, exceeded analysts’ revenue expectation and was in line with earnings estimates. On February 15, Macquarie lowered its price target for Coca-Cola stock to $47 from $50.

On the same day, UBS lowered its price target to $50 from $51. Independent Research revised its price target to $54 from $57. Wells Fargo cut its price target to $50 from $52, and J.P. Morgan cut its price target to $47 from $51. Jefferies revised its estimate to $46 from $49. On February 15, Citigroup downgraded its rating for Coca-Cola stock to “neutral” from “buy.” Coca-Cola now has a “buy” rating from 12 out of 24 analysts, while the other 12 recommend a “hold.” As of February 15, the 12-month price target for Coca-Cola stock was $50.69. This price target implies a potential to rise by 12% over the next 12 months.

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Stock movement in 2019

Coca-Cola stock declined 8.4% on February 14, the day the company announced its Q4 results. As of February 15, Coca-Cola stock was down 4.5% on a year-to-date basis. In comparison, peers PepsiCo (PEP), Keurig Dr Pepper (KDP), and Monster Beverage (MNST) have risen 4.9%, 10.1%, and 19.3%, respectively.

Coca-Cola and PepsiCo are focusing on transforming their beverage portfolios to address the changing consumer tastes and preference for healthier beverage options. Coca-Cola made several strategic deals in 2018, the biggest being the acquisition of coffee company Costa for $4.9 billion. Through the Costa acquisition, Coca-Cola aims to grow in the $500 billion global hot beverage market.

We’ll analyze Coca-Cola’s revenue guidance and discuss its volumes in the next part of this series.

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