Coca-Cola (KO) AI Stock Analysis

• Market Cap: $297.21B
• Dividend Yield: 2.92%
• Average Volume (3M): 14.44M
• Price to Earnings (P/E): 24.5
• Beta (1Y): 0.15
• Revenue Growth: 1.34%
• EPS Growth: 14.67%
• Country: US
• Employees: 69,700
• Sector: Consumer Defensive
• Sector Strength: 48
• Industry: Beverages - Non-Alcoholic
• EPS (TTM): 0.87
• Shares Outstanding: 4,303,667,500
• 10 Day Avg. Volume: 17,152,104
• 30 Day Avg. Volume: 14,439,045
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.14
• Enterprise Value/Revenue: 7.23
• Enterprise Value/Gross Profit: 11.77
• Enterprise Value/Ebitda: 19.10
• 1Y Price Target: $79.87
• Price Target Upside: 17.03% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 16

• Rating: 74 Outperform
• Price Target: $77.00 ▲(12.82% Upside)

Coca-Cola's overall stock score is driven by strong financial performance and a solid earnings call, indicating robust revenue growth and profitability. However, technical analysis shows mixed signals, and cash flow challenges need addressing. The valuation is moderate, supported by a reasonable P/E ratio and dividend yield.

Positive Factors

Earnings

The Coca-Cola Company delivered impressive absolute and YoY 1H gross/operating margin results, which are expected to continue but at a slower rate of improvement.

Growth Potential

The company shows outsized growth potential in a challenging consumer packaged goods environment.

Product Expansion

KO announced that it will be introducing a cane sugar-based Coke product in the US, which could enhance product offerings.

Negative Factors

Consumer Uncertainty

Global consumer uncertainty remains a risk, which could impact future performance.

Market Performance

Shares underperformed due to an elevated bar for the company and a subsequent miss versus street expectations on Unit Case Volumes.

Volume Trends

Volume trends weakened sequentially due to adverse weather events and consumer softness, most notably in Mexico.

Coca-Cola Business Overview & Revenue Model

Company Description

Coca-Cola Company (KO) is a global leader in the beverage industry, primarily known for its flagship product, Coca-Cola, a carbonated soft drink. Founded in 1886, the company operates in more than 200 countries and offers a diverse portfolio of over 500 brands, including non-carbonated beverages such as juices, teas, waters, and energy drinks. Coca-Cola's business is segmented into several areas, including sparkling soft drinks, still beverages, and water, catering to various consumer preferences and health trends.

How the Company Makes Money

Coca-Cola generates revenue primarily through the sale of its beverages, which are distributed through a vast network of bottling partners, retail outlets, and vending machines. The company's revenue model is anchored in a combination of direct sales and partnerships with bottlers who produce, package, and distribute its products. Key revenue streams include sales of concentrate to bottlers, as well as the sale of finished products in markets. Additionally, Coca-Cola capitalizes on brand licensing, merchandising, and marketing partnerships to enhance its revenue. Seasonal promotions and limited-edition products further contribute to sales spikes, while strategic collaborations with major retailers and food service providers help expand market presence and drive sales volume.

Coca-Cola Financial Statement Overview

Summary

Coca-Cola demonstrates strong financial performance with robust revenue growth and profitability. The income statement shows efficient cost management and significant profitability with a net profit margin of 25.9%. The balance sheet is solid with moderate leverage and a strong equity position. However, there are cash flow challenges due to increased capital expenditures, resulting in negative free cash flow.

Income Statement

Coca-Cola demonstrates strong revenue performance with a steady increase in total revenue over the years. TTM (Trailing-Twelve-Months) gross profit margin stands at 61.4%, indicating efficient cost management. Net profit margin for the TTM is 25.9%, showcasing significant profitability. The EBIT margin of 28.0% and EBITDA margin of 36.7% further highlight operational efficiency. Revenue growth has been consistent, with a notable year-over-year growth from 2023 to 2024. Overall, the income statement reflects a robust financial position, driven by stable revenue and improved profitability.

Balance Sheet

Coca-Cola's balance sheet is solid with a debt-to-equity ratio of 1.73 for the TTM, indicating moderate leverage. The company maintains a healthy equity ratio of 27.4%, reflecting a strong proportion of equity in its asset base. Return on Equity (ROE) is at 42.6%, demonstrating excellent profitability relative to shareholder's equity. However, the slight increase in total debt over the years suggests a need to monitor leverage. Overall, the balance sheet is well-managed, with a strong equity position and efficient use of debt.

Cash Flow

Coca-Cola's cash flow statements reveal a temporary dip in free cash flow during the TTM due to increased capital expenditures, resulting in negative free cash flow. The operating cash flow to net income ratio is low at 0.11, indicating a disparity between cash generated from operations and reported net income. The free cash flow to net income ratio is negative, reflecting current cash flow pressures. Despite this, historical cash flow performance has been strong, with positive free cash flow and consistent operating cash flow in previous years. The company should focus on managing capital expenditures to restore free cash flow levels.

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
EBITDA	15.82B	15.61B	13.83B	15.47B	12.72B
Net Income	10.63B	10.71B	9.54B	9.77B	7.75B
Balance Sheet
Total Assets	100.55B	97.70B	92.76B	94.35B	87.30B
Cash, Cash Equivalents and Short-Term Investments	14.57B	13.66B	11.63B	12.63B	10.91B
Total Debt	45.73B	43.43B	40.60B	44.23B	44.41B
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: Negative
• Last Price: 68.25
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KO, the sentiment is Negative. The current price of 68.25 is below the 20-day moving average (MA) of 69.65, below the 50-day MA of 69.67, and above the 200-day MA of 67.66, indicating a neutral trend. The MACD of -0.29 indicates Positive momentum. The RSI at 40.62 is Neutral, neither overbought nor oversold. The STOCH value of 30.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KO.

Coca-Cola Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MNST	80 Outperform	$61.19B	39.66	24.10%	―	3.70%	-0.53%
COKE	78 Outperform	$10.16B	19.48	41.45%	4.97%	3.22%	23.88%
PEP	76 Outperform	$205.74B	27.40	39.88%	3.78%	-0.34%	-20.51%
KO	74 Outperform	$297.21B	24.47	44.76%	2.92%	1.34%	14.67%
CCEP	70 Outperform	$40.29B	24.08	17.99%	2.54%	9.65%	-4.26%
KDP	68 Neutral	$39.27B	25.65	6.18%	3.15%	4.63%	-28.22%
Sector *	63 Neutral	$20.49B	14.78	-2.88%	3.11%	1.86%	-5.76%

Coca-Cola Corporate Events

Coca-Cola Restructures Operations for Improved Efficiency

Effective January 1, 2025, Coca-Cola will streamline its operations by discontinuing its Global Ventures segment, which was responsible for overseeing Costa Limited, innocent, and doğadan. These businesses will now be integrated into the Europe, Middle East, and Africa segment, while Costa’s ready-to-drink business and Monster Beverage Corporation fees will be reported in their respective geographic segments. This restructuring aims to simplify Coca-Cola’s operating structure and improve efficiency.