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Coca-Cola (KO) Gains As Market Dips: What You Should Know

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Coca-Cola (KO - Free Report) closed at $51.64 in the latest trading session, marking a +1.67% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.54%. Meanwhile, the Dow gained 0.97%, and the Nasdaq, a tech-heavy index, lost 2.41%.

Prior to today's trading, shares of the world's largest beverage maker had gained 3.63% over the past month. This has outpaced the Consumer Staples sector's loss of 0.94% and the S&P 500's loss of 1.04% in that time.

Investors will be hoping for strength from KO as it approaches its next earnings release. The company is expected to report EPS of $0.50, down 1.96% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $8.52 billion, down 0.92% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.12 per share and revenue of $36.73 billion, which would represent changes of +8.72% and +11.26%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for KO. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. Over the past month, the Zacks Consensus EPS estimate has moved 1.38% higher. KO is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note KO's current valuation metrics, including its Forward P/E ratio of 24. This represents a premium compared to its industry's average Forward P/E of 20.85.

It is also worth noting that KO currently has a PEG ratio of 4.44. 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. Beverages - Soft drinks stocks are, on average, holding a PEG ratio of 2.55 based on yesterday's closing prices.

The Beverages - Soft drinks industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 168, putting it in the bottom 35% 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.

To follow KO in the coming trading sessions, be sure to utilize Zacks.com.


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