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Coca-Cola (KO) Gains But Lags Market: What You Should Know

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In the latest trading session, Coca-Cola (KO - Free Report) closed at $49.28, marking a +1.15% move from the previous day. The stock lagged the S&P 500's daily gain of 1.61%. Meanwhile, the Dow gained 1.51%, and the Nasdaq, a tech-heavy index, added 1.87%.

Prior to today's trading, shares of the world's largest beverage maker had gained 1.02% over the past month. This has outpaced the Consumer Staples sector's loss of 2.47% and the S&P 500's loss of 4.08% in that time.

Wall Street will be looking for positivity from KO as it approaches its next earnings report date. This is expected to be October 22, 2020. On that day, KO is projected to report earnings of $0.45 per share, which would represent a year-over-year decline of 19.64%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8.35 billion, down 12.22% from the year-ago period.

KO's full-year Zacks Consensus Estimates are calling for earnings of $1.80 per share and revenue of $32.97 billion. These results would represent year-over-year changes of -14.69% and -9.89%, respectively.

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

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. KO currently has a Zacks Rank of #4 (Sell).

Digging into valuation, KO currently has a Forward P/E ratio of 27.1. For comparison, its industry has an average Forward P/E of 21.45, which means KO is trading at a premium to the group.

We can also see that KO currently has a PEG ratio of 5.63. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. KO's industry had an average PEG ratio of 4.47 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 120, which puts it in the top 48% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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