The Zacks Consumer Staples sector has held up relatively well in 2022, down roughly 12%, vs. the S&P 500’s decline of more than 20%.

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Companies in the sector can generate revenue in the face of good and bad economic situations thanks to their products being in consistent demand.

One of the more popular stocks in the sector, The Coca-Cola Company (KO Quick QuoteKO - Free Report) , is gearing up to unveil quarterly earnings on October 25th before the market opens.

Coca-Cola is an American multinational corporation best known for its flagship Coca-Cola beverage. KO’s strong brand equity, marketing, research, and innovation help it to garner a market share of more than 40% in the non-alcoholic beverage industry.

Currently, the beverage titan carries a Zacks Rank #4 (Sell) with an overall VGM Score of a D.

How does everything else shape up for the company heading into the report? Let’s take a closer look.

Share Performance & Valuation

Year-to-date, KO shares have displayed a high level of relative strength, down just above 1% and widely outperforming the general market.

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However, over the last three months, KO shares have lagged the S&P 500 by a fair margin, down more than 7%.

Image Source: Zacks Investment Research

While shares have easily crushed the general market’s performance YTD, the recent price action of KO shares indicates that sellers have taken a slight grip.

KO shares trade at a 20% premium relative to the Zacks Consumer Staples sector, with the company carrying a Value Style Score of a D.

Still, the company’s 22.8X forward earnings multiple is below the five-year median of 24.6X and highs of 27.1X earlier in 2022. 

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Quarterly Estimates

Analysts have had mixed reactions to the quarter to be reported over the last several months, with one downwards and one upwards earnings estimate revision. The Zacks Consensus EPS Estimate of $0.64 suggests a marginal Y/Y decline in earnings of 1.5%.

Image Source: Zacks Investment Research

The company’s top-line is in better health – the Zacks Consensus Sales Estimate of $10.6 billion for the quarter indicates Y/Y revenue growth of roughly 5.5%.

Quarterly Performance & Market Reactions

Coca-Cola has been on an impressive earnings streak, exceeding the Zacks Consensus EPS and Sales Estimates in seven consecutive quarters.

Just in its latest print, the beverage titan registered a 4.5% bottom-line beat paired with a 5.3% revenue beat. Below is a chart illustrating the company’s revenue on a quarterly basis.

Image Source: Zacks Investment Research

Shares don’t see much action following quarterly results; shares haven’t moved in either direction by more than 1.3% following each of its last three earnings releases.

Putting Everything Together

KO shares have outperformed the general market YTD but have lagged over the last three months.

Shares trade below their five-year median forward earnings multiple but well above the Zacks Consumer Staples sector average.

Analysts have had mixed reactions in their outlook, with estimates suggesting a Y/Y decline in earnings but an uptick in revenue, likely reflecting margin compression.

Further, Coca-Cola has consistently exceeded quarterly estimates, but shares haven’t seen much action following the last three earnings releases.

Heading into the print, The Coca-Cola Company (KO Quick QuoteKO - Free Report) carries a Zacks Rank #4 (Sell) with an Earnings ESP Score of -0.4%.