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How Coca-Cola’s Valuation Looks after Q1 Results

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Valuation after Q1 results

Coca-Cola’s (KO) 12-month forward PE ratio hasn’t changed much in reaction to the company’s first-quarter results, which were announced on April 23. As of April 25, Coca-Cola was trading at a 12-month forward PE of 22.2x compared to 22.1x before the first-quarter results were declared. Coca-Cola’s first-quarter revenue and earnings surpassed analysts’ expectations, but the company kept its full-year 2019 guidance unchanged.

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PepsiCo (PEP), Keurig Dr Pepper (KDP), and Monster Beverage (MNST), Coca-Cola’s peers in the nonalcoholic beverage sector,  were trading at 12-month forward PEs of 22.3x, 21.9x, and 27.7, respectively, as of April 25.

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Analysts’ expectations for 2019

Analysts expect Coca-Cola’s revenue to rise 8.8% to $34.7 billion in 2019. Analysts expect Coca-Cola’s adjusted EPS to grow 1.0% to $2.10 in 2019, as the impact of higher revenue is expected to be partially offset by currency headwinds.

Coca-Cola is investing in innovation and marketing efforts to drive revenue growth. The company made some key acquisitions recently including the $4.9 billion acquisition of coffee company Costa to strengthen its portfolio of healthy beverages.

Analysts expect rival PepsiCo’s adjusted EPS to decline 2.5% to $5.52 in 2019, while revenue is expected to rise 2.9% to $66.5 billion. Revenue of Keurig Dr Pepper is forecasted to rise 2.1% to $11.3 billion this year, and adjusted EPS is expected to increase 16.3% to $1.21. Analysts forecast Monster Beverage’s sales to increase 9.3% to $4.2 billion and adjusted EPS to grow 11.7% to $2.01 in 2019.

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