Coca-Cola (KO) AI Stock Analysis

• Market Cap: $301.03B
• Dividend Yield: 2.81%
• Average Volume (3M): 20.94M
• Price to Earnings (P/E): 28.4
• Beta (1Y): 0.15
• Revenue Growth: 1.96%
• EPS Growth: -0.45%
• Country: US
• Employees: 69,700
• Sector: Consumer Defensive
• Sector Strength: 86
• Industry: Beverages - Non-Alcoholic
• EPS (TTM): 2.46
• Shares Outstanding: 4,303,567,000
• 10 Day Avg. Volume: 21,942,073
• 30 Day Avg. Volume: 20,938,002
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 6.28
• Price to Cash Flow (P/CF): 18.70
• P/FCF Ratio: 21.20
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $76.36
• Price Target Upside: 7.91% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 17

Coca-Cola's overall stock score reflects strong financial performance and positive earnings guidance, supported by consistent revenue growth and profitability. While technical indicators show a generally positive trend, valuation remains high, suggesting limited upside potential. The recent corporate restructuring is seen as a positive move to enhance efficiency. However, challenges such as declining EBIT margins, cash flow pressures, and macroeconomic headwinds pose risks that need careful management.

Positive Factors

Innovation and Marketing

Coca-Cola's use of generative AI in marketing is leading to quicker and cheaper ad campaigns that resonate with consumers, enhancing productivity.

Operational Resilience

Coca-Cola's 'all weather strategy' and high-functioning bottler system have proven uniquely resilient to volatility over the past five years.

Negative Factors

Consumer Confidence

Coca-Cola is not immune to declining consumer confidence in the U.S., which has deteriorated faster than expected.

Foreign Exchange Impact

Mounting foreign exchange headwinds are a key area of concern, impacting the reported FY25 dollar earnings per share growth.

Coca-Cola Business Overview & Revenue Model

Company Description

The Coca-Cola Company is a global beverage leader headquartered in Atlanta, Georgia. It operates in the non-alcoholic beverage sector, offering a vast portfolio of sparkling soft drinks, water, sports drinks, juice, dairy, and plant-based beverages. Its flagship product, Coca-Cola, is one of the world's most recognized brands. The company operates in more than 200 countries, providing a diverse range of beverage products to meet varying consumer preferences and regional tastes.

How the Company Makes Money

Coca-Cola makes money primarily through the production, distribution, and sale of non-alcoholic beverages. The company's revenue model is built on a combination of direct sales of finished products to retailers and sales of concentrates and syrups to authorized bottling partners who manufacture, package, and distribute the final products. Key revenue streams include the sale of branded sparkling drinks like Coca-Cola, Diet Coke, and Sprite, as well as still beverages such as water, tea, and juices. Coca-Cola benefits from strategic partnerships with bottling companies, which help expand its global reach and distribution capabilities. The company also generates income through licensing agreements and brand merchandising. Important factors contributing to its earnings include global brand recognition, extensive distribution networks, and a broad product portfolio catering to diverse consumer needs.

Coca-Cola Financial Statement Overview

Summary

Coca-Cola displays strong revenue growth and profitability, with a healthy balance sheet and positive cash flow. The key strengths include high net profit margins and ROE, indicating effective management and competitive positioning. However, declining EBIT margins and cash flow generation could pose challenges if not addressed. The company's leverage is within industry norms, but it should be monitored closely in the context of potential macroeconomic shifts.

Income Statement

Coca-Cola has demonstrated strong revenue growth with a 2.86% increase from 2023 to 2024. The gross profit margin stands at 61.05%, indicating efficient cost management. However, the decline in EBIT margin from 24.72% in 2023 to 21.23% in 2024 reflects increased operating expenses or reduced pricing power. Net profit margin remains robust at 22.59%, showcasing profitability. Overall, the income statement reflects strong growth and profitability, but with some pressure on operating margins.

Balance Sheet

The debt-to-equity ratio is 1.79, suggesting moderate leverage, which is typical for the industry. Return on equity (ROE) is healthy at 42.76%, indicating efficient use of equity capital. The equity ratio is 24.72%, showing a stable capital structure. While the company maintains a solid balance sheet, a relatively high debt level could pose risks in a rising interest rate environment.

Cash Flow

There is a significant decline in operating cash flow from 2023 to 2024, but the company still generates positive free cash flow. The free cash flow to net income ratio is 0.45, indicating a good level of cash generation relative to net income. However, the free cash flow growth rate is negative, reflecting cash flow pressures. Overall, the cash flow remains positive, but with signs of decreasing cash generation, which requires attention.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
47.06B	45.75B	43.00B	38.66B	33.01B
	Gross Profit
28.74B	27.23B	25.00B	23.30B	19.58B
	EBIT
9.99B	11.31B	10.91B	10.31B	9.00B
	EBITDA
15.82B	15.62B	13.81B	14.54B	12.66B
	Net Income Common Stockholders
10.63B	10.71B	9.54B	9.77B	7.75B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
12.85B	13.66B	11.63B	12.63B	10.91B
	Total Assets
100.55B	97.70B	92.76B	94.35B	87.30B
	Total Debt
44.52B	42.06B	39.15B	42.76B	42.79B
	Net Debt
33.69B	32.70B	29.63B	33.08B	36.00B
	Total Liabilities
74.18B	70.22B	66.94B	69.49B	66.01B
	Stockholders Equity
24.86B	25.94B	24.11B	23.00B	19.30B
Cash Flow		Free Cash Flow
4.74B	9.75B	9.53B	11.26B	8.67B
	Operating Cash Flow
6.80B	11.60B	11.02B	12.63B	9.84B
	Investing Cash Flow
2.52B	-3.35B	-763.00M	-2.77B	-1.48B
	Financing Cash Flow
-6.91B	-8.31B	-10.25B	-6.79B	-8.07B

Coca-Cola Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 70.76
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KO, the sentiment is Positive. The current price of 70.76 is above the 20-day moving average (MA) of 70.03, above the 50-day MA of 68.81, and above the 200-day MA of 66.09, indicating a bullish trend. The MACD of 0.76 indicates Negative momentum. The RSI at 64.54 is Neutral, neither overbought nor oversold. The STOCH value of 86.55 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KO.

Coca-Cola Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CCEP	79 Outperform	$39.21B	25.52	17.43%	2.50%	11.73%	-15.34%
PEP	77 Outperform	$199.65B	20.95	52.42%	3.72%	0.42%	5.77%
KDP	76 Outperform	$47.07B	32.94	5.77%	2.61%	3.62%	-32.23%
MNST	76 Outperform	$56.69B	38.93	21.27%	―	4.94%	-4.13%
COKE	74 Outperform	$11.85B	21.62	44.38%	0.44%	3.69%	60.51%
KO	73 Outperform	$301.03B	28.42	41.86%	2.81%	1.96%	-0.45%
Sector *	63 Neutral	$20.41B	13.98	-16.01%	3.26%	1.30%	5.01%

Coca-Cola Corporate Events

Coca-Cola Streamlines Operations with Segment Reorganization

On January 1, 2025, Coca-Cola streamlined its operations by discontinuing its Global Ventures segment, integrating Costa, innocent, and doğadan into the Europe, Middle East, and Africa segment, while Costa’s ready-to-drink business and Monster-related fees were allocated to relevant geographic segments. This organizational change aims to simplify Coca-Cola’s structure without affecting previously reported financial results, potentially enhancing operational efficiency and focus.