Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Shares of The Coca-Cola Company (KO - Analyst Report) reached a 52-week high of $42.48 on Tuesday, Apr 16, 2013 on announcement of expanded distribution deals with five of its bottling companies. The closing price of the cola giant on Apr 16 was $42.37.

Share Price Drivers

In concurrence with its first quarter earnings release, Coca-Cola announced that it was granting new expanded U.S. territories to five of its bottling companies to distribute its beverages, under its new beverage partnership model. The five bottling companies include Coca-Cola Bottling Co. Consolidated , Coca-Cola Bottling Company United Inc., Swire Coca-Cola USA, Coca-Cola Bottling Company High Country and Corinth Coca-Cola Bottling Works Inc.

The new agreement with the bottlers is expected to improve the efficiency of the operating territories and overall profits in the U.S. by shifting to a more franchise based model. The addition of new territories will add some of the important and largest cities to the existing territories of the bottling partners. The present transaction is expected to close during 2014.

The company’s North American beverage business is seeing sluggish volumes of its sparkling beverages like Coke and Fanta for quite sometime. Changing consumer preferences, increasing health consciousness and rising obesity concerns are affecting demand of the carbonated beverages of Coca-Cola as well as other soft drink companies like PepsiCo, Inc. (PEP - Analyst Report) and Dr Pepper Snapple Group Inc. (DPS - Analyst Report).

KO is trying to re-invigorate sales of its soft drinks by introducing new stevia (a non-nutritive sweetener) based products, innovative packaging and stronger merchandising solutions to cater to the ever-changing needs of its consumers.

The company also announced mixed first quarter results on the same day. Coca-Cola’s first quarter 2013 earnings of 46 cents per share beat the Zacks Consensus Estimate of 45 cents by a penny. Moreover, earnings grew 5% from the prior-year quarter as revenue decline was offset by significantly improved margins. Revenues declined 1% to $11.04 billion as benefit from volume growth was largely offset by currency headwinds, structural changes and two fewer selling days in the quarter.

Coca-Cola carries a Zacks Rank #3 (Hold).

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

Learn more

Start for as little as $4.50 per trade.

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
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%