Coca-Cola (KO) AI Stock Analysis

• Market Cap: $305.22B
• Dividend Yield: 2.88%
• Average Volume (3M): 15.11M
• Price to Earnings (P/E): 28.4
• Beta (1Y): 0.16
• Revenue Growth: 1.15%
• EPS Growth: 0.28%
• Country: US
• Employees: 69,700
• Sector: Consumer Defensive
• Sector Strength: 56
• Industry: Beverages - Non-Alcoholic
• EPS (TTM): 0.73
• Shares Outstanding: 4,304,266,600
• 10 Day Avg. Volume: 19,474,217
• 30 Day Avg. Volume: 15,114,701
• PEG Ratio: 22.61
• Price to Book (P/B): 11.30
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -319.30
• Enterprise Value/Market Cap: 1.10
• Enterprise Value/Revenue: 1.80
• Enterprise Value/Gross Profit: 11.77
• Enterprise Value/Ebitda: 5.37
• 1Y Price Target: $79.50
• Price Target Upside: 12.11% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 16

• Rating: 75 Outperform
• Price Target: $79.00 ▲(11.41%Upside)

Coca-Cola's strong performance in profitability and strategic initiatives during the earnings call contribute significantly to its score. Challenges in cash flow and valuation slightly offset these positives. Technical analysis indicates a stable but cautious market sentiment.

Positive Factors

Innovation

Innovation shift toward healthier products, including Coke Zero and zero-sugar products, plays a significant role in Coke's growth profile.

Market Share

Durable market share gains for Coca-Cola are reinforced by the struggles of its peers in non-overlapping areas.

Pricing Power

Coca-Cola's strong pricing power is a significant advantage over competitors, contributing to its sustained growth.

Negative Factors

Geopolitical and Market Challenges

Short-term challenges include geopolitical strife in the Middle East and softness in the US market.

Potential Liabilities

The potential incremental tax and interest liability increased $400m, bringing the aggregate amount to ~$12.4b.

Coca-Cola Business Overview & Revenue Model

Company Description

The Coca-Cola Company, a beverage company, manufactures, markets, and sells various nonalcoholic beverages worldwide. The company provides sparkling soft drinks, sparkling flavors; water, sports, coffee, and tea; juice, value-added dairy, and plant-based beverages; and other beverages. It also offers beverage concentrates and syrups, as well as fountain syrups to fountain retailers, such as restaurants and convenience stores. The company sells its products under the Coca-Cola, Diet Coke/Coca-Cola Light, Coca-Cola Zero Sugar, caffeine free Diet Coke, Cherry Coke, Fanta Orange, Fanta Zero Orange, Fanta Zero Sugar, Fanta Apple, Sprite, Sprite Zero Sugar, Simply Orange, Simply Apple, Simply Grapefruit, Fresca, Schweppes, Thums Up, Aquarius, Ayataka, BODYARMOR, Ciel, Costa, Dasani, dogadan, FUZE TEA, Georgia, glacéau smartwater, glacéau vitaminwater, Gold Peak, Ice Dew, I LOHAS, Powerade, Topo Chico, AdeS, Del Valle, fairlife, innocent, Minute Maid, and Minute Maid Pulpy brands. It operates through a network of independent bottling partners, distributors, wholesalers, and retailers, as well as through bottling and distribution operators. The company was founded in 1886 and is headquartered in Atlanta, Georgia.

How the Company Makes Money

Coca-Cola primarily generates revenue through the sale of beverage concentrates and syrups to authorized bottling partners who manufacture, package, and distribute the final products to retailers and consumers. This franchised bottling system allows Coca-Cola to leverage its brand and marketing expertise while bottlers handle production and distribution logistics. Additionally, Coca-Cola earns revenue from direct sales of finished beverages to retailers, restaurants, and other outlets. Strategic partnerships and joint ventures, such as those with McDonald's and other major chains, further enhance its market presence and drive sales. The company's earnings are also bolstered by continuous innovation in product offerings and expansion into emerging markets, increasing brand visibility and consumer reach.

Coca-Cola Financial Statement Overview

Summary

Coca-Cola exhibits strong profitability and operational efficiency with high profit margins and a robust ROE. Nonetheless, challenges persist with declining revenue growth and cash flow generation, which could impact liquidity. The balance sheet is stable, but high leverage needs 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
EBITDA	16.01B	15.81B	15.62B	13.81B	14.54B	12.66B
Net Income	10.78B	10.63B	10.71B	9.54B	9.77B	7.75B
Balance Sheet
Total Assets	101.72B	100.55B	97.70B	92.76B	94.35B	87.30B
Cash, Cash Equivalents and Short-Term Investments	12.00B	12.85B	13.66B	11.63B	12.63B	10.91B
Total Debt	49.11B	44.52B	42.06B	39.15B	42.76B	42.79B
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: 70.91
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 70.91 is above the 20-day moving average (MA) of 70.52, above the 50-day MA of 70.87, and above the 200-day MA of 67.13, indicating a bullish trend. The MACD of -0.05 indicates Negative momentum. The RSI at 52.43 is Neutral, neither overbought nor oversold. The STOCH value of 78.26 is Neutral, 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	$43.12B	28.07	17.43%	1.88%	11.73%	-15.34%
PEP	77 Outperform	$187.12B	20.07	50.06%	4.17%	-0.38%	2.23%
MNST	76 Outperform	$61.48B	41.62	20.00%	―	1.47%	-4.87%
KO	75 Outperform	$305.22B	28.39	40.98%	2.88%	1.15%	0.28%
KDP	72 Outperform	$45.59B	30.41	6.13%	2.72%	3.95%	-28.73%
COKE	69 Neutral	$10.11B	20.16	36.83%	0.86%	3.21%	31.84%
Sector *	50 Neutral	AU$2.24B	3.46	-14.55%	12.59%	7.38%	-66.34%

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.

The most recent analyst rating on (KO) stock is a Buy with a $70.00 price target. To see the full list of analyst forecasts on Coca-Cola stock, see the KO Stock Forecast page.