Coca-Cola (KO) AI Stock Analysis

• Market Cap: $308.57B
• Dividend Yield: 2.73%
• Average Volume (3M): 16.46M
• Price to Earnings (P/E): 28.7
• Beta (1Y): 0.15
• Revenue Growth: 1.15%
• EPS Growth: 0.28%
• Country: US
• Employees: 69,700
• Sector: Consumer Defensive
• Sector Strength: 72
• Industry: Beverages - Non-Alcoholic
• EPS (TTM): 0.73
• Shares Outstanding: 4,304,266,600
• 10 Day Avg. Volume: 15,358,816
• 30 Day Avg. Volume: 16,457,667
• PEG Ratio: 23.16
• Price to Book (P/B): 11.58
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -327.09
• Enterprise Value/Market Cap: 1.12
• Enterprise Value/Revenue: 1.84
• Enterprise Value/Gross Profit: 12.02
• Enterprise Value/Ebitda: 5.48
• 1Y Price Target: $79.33
• Price Target Upside: 11.51% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 17

• Rating: 80 Outperform
• Price Target: ―

Coca-Cola's strong financial performance, particularly in profitability and operational efficiency, underpins its overall score. The company shows resilience with strong organic revenue growth and strategic initiatives outlined in the earnings call. While the stock is relatively expensive, its solid dividend yield and positive technical indicators support its attractiveness. However, attention to cash flow management and leverage is necessary to maintain financial health.

Positive Factors

Financial Performance

Coca-Cola delivered a modest Q1 top/bottom line beat, highlighted by strong 6% organic revenue growth.

Operational Resilience

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

Strategic Management

Coca-Cola is executing well on its Revenue Growth Management strategy by offering consumers value through price-pack architecture shifts while driving volume growth.

Negative Factors

Consumer Confidence

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

Currency and Economic Conditions

The key drag on EPS stems from forex headwinds and higher taxes due to global minimum tax regulations.

Tax and Regulatory Challenges

A key risk includes uncertainty surrounding the IRS tax dispute appeal, which could take years to resolve.

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 demonstrates strong profitability and operational efficiency, with high profit margins and ROE. However, challenges in revenue growth and cash flow generation, coupled with high leverage, require careful monitoring.

Income Statement

Coca-Cola's income statement reflects strong profitability with a stable gross profit margin of approximately 61% over the TTM period. The net profit margin remains robust at 23%, indicating efficient cost management. However, revenue growth is slightly negative at -0.4% TTM, suggesting a stabilization in top-line growth. Despite this, the company maintains high EBIT and EBITDA margins of 24.5% and 31.9%, respectively, underscoring its operational efficiency.

Balance Sheet

The balance sheet shows a healthy equity ratio of 25.8%, reflecting a solid capital structure. However, the debt-to-equity ratio stands at 1.87, indicating relatively high leverage, which may pose risks if not managed prudently. Return on equity is strong at 41.1%, suggesting effective use of shareholder funds to generate profits.

Cash Flow

Cash flow analysis reveals a significant decline in free cash flow growth, with the most recent TTM period showing a negative free cash flow of -$928 million. The operating cash flow to net income ratio is low at 0.1, which may indicate challenges in converting earnings into cash. The free cash flow to net income ratio is also concerning at -0.086, suggesting potential liquidity issues.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
46.89B	47.06B	45.75B	43.00B	38.66B	33.01B
	Gross Profit
28.64B	28.74B	27.23B	25.00B	23.30B	19.58B
	EBIT
11.51B	9.99B	11.31B	10.91B	10.31B	9.00B
	EBITDA
16.01B	15.81B	15.62B	13.81B	14.54B	12.66B
	Net Income Common Stockholders
10.78B	10.63B	10.71B	9.54B	9.77B	7.75B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
12.00B	12.85B	13.66B	11.63B	12.63B	10.91B
	Total Assets
101.72B	100.55B	97.70B	92.76B	94.35B	87.30B
	Total Debt
49.11B	44.52B	42.06B	39.15B	42.76B	42.79B
	Net Debt
40.69B	33.69B	32.70B	29.63B	33.08B	36.00B
	Total Liabilities
73.96B	74.18B	70.22B	66.94B	69.49B	66.01B
	Stockholders Equity
26.20B	24.86B	25.94B	24.11B	23.00B	19.30B
Cash Flow		Free Cash Flow
-928.00M	4.74B	9.75B	9.53B	11.26B	8.67B
	Operating Cash Flow
1.07B	6.80B	11.60B	11.02B	12.63B	9.84B
	Investing Cash Flow
1.13B	2.52B	-3.35B	-763.00M	-2.77B	-1.48B
	Financing Cash Flow
-3.88B	-6.91B	-8.31B	-10.25B	-6.79B	-8.07B

Coca-Cola Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 71.14
• 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 71.14 is below the 20-day moving average (MA) of 71.34, above the 50-day MA of 71.04, and above the 200-day MA of 67.30, indicating a bullish trend. The MACD of 0.08 indicates Negative momentum. The RSI at 52.96 is Neutral, neither overbought nor oversold. The STOCH value of 81.70 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
KO	80 Outperform	$308.57B	28.70	40.98%	2.73%	1.15%	0.28%
CCEP	79 Outperform	$40.82B	26.57	17.43%	2.39%	11.73%	-15.34%
MNST	76 Outperform	$61.31B	41.51	20.00%	―	1.47%	-4.87%
PEP	75 Outperform	$178.40B	19.13	50.06%	4.16%	-0.38%	2.23%
KDP	73 Outperform	$44.83B	29.90	6.13%	2.69%	3.95%	-28.73%
COKE	69 Neutral	$9.85B	19.65	36.83%	0.71%	3.21%	31.83%
Sector *	64 Neutral	$8.78B	14.55	4.78%	173.91%	3.39%	2.17%

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.