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

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Coca-Cola (KO - Free Report) closed at $54.44 in the latest trading session, marking a +0.57% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.13%. Meanwhile, the Dow gained 0.24%, and the Nasdaq, a tech-heavy index, added 0.15%.

Coming into today, shares of the world's largest beverage maker had gained 4.02% in the past month. In that same time, the Consumer Staples sector gained 3.27%, while the S&P 500 gained 2.59%.

KO will be looking to display strength as it nears its next earnings release. On that day, KO is projected to report earnings of $0.41 per share, which would represent a year-over-year decline of 6.82%. Meanwhile, our latest consensus estimate is calling for revenue of $8.69 billion, down 4.21% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.89 per share and revenue of $33.08 billion, which would represent changes of -10.43% and -9.59%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for KO. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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. The Zacks Consensus EPS estimate has moved 0.07% higher within the past month. KO is currently a Zacks Rank #3 (Hold).

Digging into valuation, KO currently has a Forward P/E ratio of 28.72. For comparison, its industry has an average Forward P/E of 24.95, which means KO is trading at a premium to the group.

Also, we should mention that KO has a PEG ratio of 6.84. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Beverages - Soft drinks industry currently had an average PEG ratio of 4.26 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 213, which puts it in the bottom 17% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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