The Coca-Cola stock price is trading near its highest level this year ahead of the company’s quarterly results. The shares are trading at $55.83, which is a few points below the year-to-date high of $56.70. It has a market capitalization of more than $240 billion.
Coca-Cola earnings preview
Coca-Cola, the world’s biggest beverage maker, has staged a strong recovery after crashing to $36.29 in 2020. The stock has jumped by more than 50% since then. It has also risen by about 15% this year and underperformed the main indices like the Dow Jones and S&P 500.
The Coca-Cola stock price will be in the spotlight as the company publishes its quarterly results. In general, analysts are optimistic about the company since many restaurants have reopened. Furthermore, PepsiCo, its closest competitor, unleashed a monster quarter. The company’s revenue rose by 20.50% in the second quarter, while its earnings-per-share rose to $1.70. The firm attributed the strong performance to the ongoing reopening in key markets.
Data compiled by SeekingAlpha show that analysts expect Coca-Cola will report revenue of more than $9.30 billion. They also see its earnings per share rising from $0.55 to $0.56. The company beat the forecasts in the past three straight quarters. There are also expectations that the company will boost its forward guidance.
In addition to the actual results and guidance, investors will pay attention to the company’s at-home and away from home revenue mix. In 2020, the company saw strong demand through the at-home channel since many restaurants were closed. Also, analysts will focus on the company’s geographical mix and its overall cost structure.
Is Coca-Cola stock a buy?
Coca-Cola is one of the world’s best-known brands. The company has grown its brand for decades, and its products are known well. The firm also has a strong moat across different categories. Over the years, Coca-Cola has learned to live closely with PepsiCo, its biggest competitor. As the world recovers, the company is expected to see elevated growth since its products are often used as a gauge of the strength of the economy.
Most analysts have a buy or hold rating on the company. Data compiled by MarketBeat shows that the average estimate for the Coca-Cola stock is $59.69, which is about 6.92% above the current level. Analysts at Jefferies recently boosted their estimate from $57 to $59. Similarly, those at Deutsche Bank, Royal Bank of Canada, Argus, and Credit Suisse expect the stock will rise above $60. Still, these expectations are relatively modest.
Meanwhile, a Discounted Cash Flow (DCF) by Simply Wall St shows that the stock is undervalued by about 24%. They estimate that the shares are worth about $55 per share.
Other valuation metrics also show that the stock is relatively undervalued. It has a price-to-earnings ratio of 33, which is lower than the S&P average of about 45.
Coca-Cola stock price analysis
The daily chart shows that the KO stock price has generally been in a bullish trend recently. As a result, the upward trend is being supported by the 25-day and 50-day Moving Averages. It has also formed what looks like a cup and handle pattern. In price action, a cup and handle is usually a sign that the existing trend will continue.
Therefore, there is a possibility that the stock will maintain a bullish trend as bulls target the next key resistance at $60.