Back to top

Analyst Blog

Rating agency Standard & Poor's Ratings Services (“S&P”) has upgraded its ratings outlook on The Coca Cola Company (KO - Analyst Report) on the back of the company’s strong operations and credit quality.

Despite the prevailing market turmoil, S&P has revised Coca Cola’s outlook to “positive” from “stable” and reiterated "A+" long-term corporate credit and "A-1" short-term corporate credit and commercial paper ratings. The ratings agency continues to expect robust performance from Coca Cola even in the uncertain economic environment.

Coca Cola recently reported strong operating earnings of $1.03 per share in the third-quarter 2011, ahead of the Zacks Consensus Estimate by a penny. It was also higher than the year-ago EPS by 12%. The results were encouraged by strong growth outside the U.S. and in emerging markets. Coca Cola also sold more drinks in each region during the quarter and continued to gain market share in North America from rival PepsiCo Inc. (PEP - Analyst Report).

According to S&P, Coca Cola's acquisition of Coca-Cola Enterprises Inc. (CCE - Analyst Report)’s North American bottling operations has led to expansion and stands to benefit from the manufacturing and distribution efficiencies in US.

Additionally, the rating agency stated that Coca Cola has the ability to attain an annual revenue growth in the range of low to mid-single-digit, despite the ongoing pressure on its EBITDA margin. S&P also believes that the company’s cash flows will be able to retain the credit quality to support a higher rating.

Coca Cola currently holds a Zacks #3 Rank, which translates into a short-term Hold rating. On a long-term basis, we maintain a Neutral rating on the stock.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
CTPARTNERS… CTP 13.33 +3.49%
SAIA INC SAIA 45.65 +1.00%
VASCO DATA… VDSI 13.57 +0.67%
AMEDISYS IN… AMED 20.18 +0.10%
FIRSTSERVIC… FSRV 55.66 -0.13%