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Coca-Cola (KO) Outpaces Stock Market Gains: What You Should Know

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In the latest trading session, Coca-Cola (KO - Free Report) closed at $51.05, marking a +0.67% move from the previous day. This change outpaced the S&P 500's 0.52% gain on the day. Elsewhere, the Dow gained 0.01%, while the tech-heavy Nasdaq added 1.21%.

Coming into today, shares of the world's largest beverage maker had gained 5.19% in the past month. In that same time, the Consumer Staples sector gained 1.62%, while the S&P 500 gained 0.49%.

KO will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.45, down 19.64% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $8.36 billion, down 12.07% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.80 per share and revenue of $32.98 billion, which would represent changes of -14.69% and -9.86%, respectively, from the prior year.

Any recent changes to analyst estimates for KO should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.07% lower. KO currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, KO is holding a Forward P/E ratio of 28.21. For comparison, its industry has an average Forward P/E of 23.48, which means KO is trading at a premium to the group.

We can also see that KO currently has a PEG ratio of 5.87. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. KO's industry had an average PEG ratio of 4.56 as of yesterday's close.

The Beverages - Soft drinks industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 195, which puts it in the bottom 24% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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