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

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Coca-Cola (KO - Free Report) closed at $56.78 in the latest trading session, marking a +0.23% move from the prior day. This move lagged the S&P 500's daily gain of 3.06%. Elsewhere, the Dow gained 2.8%, while the tech-heavy Nasdaq added 0.18%.

Coming into today, shares of the world's largest beverage maker had lost 7.36% in the past month. In that same time, the Consumer Staples sector lost 5.87%, while the S&P 500 lost 6.15%.

Wall Street will be looking for positivity from Coca-Cola as it approaches its next earnings report date. This is expected to be October 25, 2022. On that day, Coca-Cola is projected to report earnings of $0.64 per share, which would represent a year-over-year decline of 1.54%. Our most recent consensus estimate is calling for quarterly revenue of $10.62 billion, up 5.79% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.46 per share and revenue of $42.42 billion, which would represent changes of +6.03% and +9.75%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Coca-Cola. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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. The Zacks Consensus EPS estimate has moved 0.05% lower within the past month. Coca-Cola is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, Coca-Cola is currently trading at a Forward P/E ratio of 23. Its industry sports an average Forward P/E of 23, so we one might conclude that Coca-Cola is trading at a no noticeable deviation comparatively.

Also, we should mention that KO has a PEG ratio of 3.58. 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. Beverages - Soft drinks stocks are, on average, holding a PEG ratio of 3.11 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 101, putting it in the top 41% 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.

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


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