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Coca-Cola's Q2 Earnings on the Deck: A Smart Buy Before the Release?
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Key Takeaways
KO is expected to post Q2 revenues of $12.6B, up 1.9% YoY, but EPS may dip 1.2% to 83 cents.
Favorable price/mix and digital investments are likely to support revenues despite volume weakness.
Currency headwinds and soft demand in key markets may weigh on KO's margin and EPS performance.
The Coca-Cola Company (KO - Free Report) is slated to report second-quarter 2025 earnings on July 22, before the opening bell. The company is expected to register year-over-year top-line growth when it posts second-quarter numbers.
The Zacks Consensus Estimate for revenues is pegged at $12.6 billion, implying 1.9% growth from the year-ago quarter's reported figure. The consensus estimate for earnings is pegged at 83 cents per share, indicating a 1.2% decline from the prior-year quarter’s reported figure. The consensus mark for earnings has remained unchanged in the past 30 days. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
The Atlanta, GA-based company has been reporting steady earnings outcomes, as evident from its positive top and bottom-line surprise trends in the trailing nine quarters. Coca-Cola delivered a trailing four-quarter earnings surprise of 4.9%, on average. On the last reported quarter’s earnings call, the company registered an earnings surprise of 2.8%. Given its positive record, the question is, can KO maintain its momentum?
Earnings Whispers for Coca-Cola
Our proven model does not conclusively predict an earnings beat for KO this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Key Trends in Focus Ahead of KO's Q2 Earnings Release
Coca-Cola demonstrates resilience, fueled by strong business momentum, including a diverse brand portfolio, strategic investments and consistent revenue growth across its segments. This upward trajectory has been supported by broad-based growth, improved price/mix, and effective execution of its all-weather strategy.
In the second quarter of 2025, Coca-Cola’s price/mix is projected to have gained from both price hikes and a favorable product mix. Pricing strength is expected to have stemmed from proactive adjustments in inflation-impacted markets, alongside routine pricing initiatives. Additionally, a positive mix shift in several developed markets is likely to have bolstered the company’s performance.
We anticipate favorable price/mix trends to have fueled the company’s second-quarter performance. Our model forecasts a 4.9% year-over-year increase in organic revenues for the second quarter, driven by a 5.8% rise in the price/mix, offset by a 0.9% decline in concentrate sales.
Coca-Cola’s second-quarter results are expected to reflect gains from innovations and increased digital investments. E-commerce has surged, with growth rates doubling in many countries. KO has accelerated investments in digital capabilities, enhancing consumer connections and piloting digital initiatives to capture online demand, likely boosting second-quarter revenues.
Despite a favorable price/mix in most markets, macroeconomic challenges are expected to have affected KO’s quarterly performance. Factors such as low consumer confidence in China, geopolitical and economic instability in Eurasia and the Middle East, and high inflation in Argentina are expected to have weighed on Coca-Cola's top-line performance.
Coca-Cola has been witnessing notable volume pressure in key markets, highlighting ongoing challenges in sustaining broad-based growth. The company’s volumes have been particularly weak in North America and Mexico, both crucial revenue contributors. This raises concerns about demand resilience in mature markets and underscores the need for continued agility and localized execution. Our model estimates a 1% impact on second-quarter revenues from currency headwinds.
On the last reported quarter’s earnings call, management described the to-be-reported quarter as potentially “choppy.” This reflects multiple uncertainties, including tougher year-over-year comparisons, consumer sentiment fluctuations, ongoing geopolitical tensions and the risk of supply-chain disruptions, particularly in the United States, where shipping bottlenecks could ripple through adjacent industries. Additionally, uneven recovery patterns across developed markets like North America and Europe, combined with caution around currency volatility and tariff dynamics, contribute to a lack of clear near-term visibility. These are expected to have weighed on the company’s margins and bottom line.
Our model estimates a 10-bps decline in adjusted operating margin in the second quarter, with an adjusted EPS decline of 0.6% year over year.
Based on the current rates and impacts of hedged positions, the company anticipates currency headwinds to have hurt second-quarter 2025 revenues by 3%. Comparable EPS growth is likely to have included headwinds of 5-6% from currency. Our model estimates a 3% impact on second-quarter revenues from currency headwinds.
Coca-Cola’s Price Performance & Valuation
KO’s shares have exhibited an uptrend, rising as much as 13.4% year to date. The stock has surpassed the broader industry and the Consumer Staples sector’s 4.8% and 4.6% growth, respectively. The KO stock has also outperformed the S&P 500 index, which increased 6% in the same period.
KO Stock’s YTD Performance
Image Source: Zacks Investment Research
The Coca-Cola stock has outperformed its competitor, PepsiCo Inc. (PEP - Free Report) , which has declined 4.3% year to date. The stock has also outpaced Keurig Dr Pepper Inc. (KDP - Free Report) and Monster Beverage Corporation’s (MNST - Free Report) growth of 5.5% and 12.4%, respectively, in the same period.
From the valuation standpoint, KO trades at a forward 12-month P/E multiple of 22.77X, exceeding the industry average of 17.96X and the S&P 500’s average of 22.59X. Coca-Cola’s valuation appears quite pricey.
Image Source: Zacks Investment Research
KO undoubtedly commands a high valuation, reflecting its strong market positioning, brand power and long-term growth potential compared with other non-alcoholic beverage companies. However, we believe that its valuation is too stretched at this time.
Investment Thesis
Coca-Cola remains a powerhouse in the beverage industry, commanding more than 40% of the global non-alcoholic beverage market. The company’s enduring success is driven by a formidable market presence, world-class marketing capabilities and a relentless focus on innovation. With a portfolio boasting more than 4,700 products and over 500 brands, spanning sodas, juices, waters and energy drinks, Coca-Cola continues to reinforce its leadership.
KO’s dominant market share, broad product range and strategic emphasis on innovation and digital transformation position it well for sustained long-term growth. However, short-term headwinds such as inflationary pressures, global macroeconomic uncertainties and unfavorable currency fluctuations remain challenges to navigate.
Conclusion
Regardless of how Coca-Cola stock moves post its second-quarter results, the company remains a compelling long-term investment, backed by solid profitability and a growing global presence. Prospective investors should assess the current valuation before initiating a position, while existing shareholders may find it wise to stay invested. The upcoming earnings are likely to reinforce Coca-Cola’s resilience and sustained growth outlook.
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Coca-Cola's Q2 Earnings on the Deck: A Smart Buy Before the Release?
Key Takeaways
The Coca-Cola Company (KO - Free Report) is slated to report second-quarter 2025 earnings on July 22, before the opening bell. The company is expected to register year-over-year top-line growth when it posts second-quarter numbers.
The Zacks Consensus Estimate for revenues is pegged at $12.6 billion, implying 1.9% growth from the year-ago quarter's reported figure. The consensus estimate for earnings is pegged at 83 cents per share, indicating a 1.2% decline from the prior-year quarter’s reported figure. The consensus mark for earnings has remained unchanged in the past 30 days. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
The Atlanta, GA-based company has been reporting steady earnings outcomes, as evident from its positive top and bottom-line surprise trends in the trailing nine quarters. Coca-Cola delivered a trailing four-quarter earnings surprise of 4.9%, on average. On the last reported quarter’s earnings call, the company registered an earnings surprise of 2.8%. Given its positive record, the question is, can KO maintain its momentum?
Earnings Whispers for Coca-Cola
Our proven model does not conclusively predict an earnings beat for KO this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Coca-Cola has a Zacks Rank #2 and an Earnings ESP of -0.46%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Key Trends in Focus Ahead of KO's Q2 Earnings Release
Coca-Cola demonstrates resilience, fueled by strong business momentum, including a diverse brand portfolio, strategic investments and consistent revenue growth across its segments. This upward trajectory has been supported by broad-based growth, improved price/mix, and effective execution of its all-weather strategy.
In the second quarter of 2025, Coca-Cola’s price/mix is projected to have gained from both price hikes and a favorable product mix. Pricing strength is expected to have stemmed from proactive adjustments in inflation-impacted markets, alongside routine pricing initiatives. Additionally, a positive mix shift in several developed markets is likely to have bolstered the company’s performance.
We anticipate favorable price/mix trends to have fueled the company’s second-quarter performance. Our model forecasts a 4.9% year-over-year increase in organic revenues for the second quarter, driven by a 5.8% rise in the price/mix, offset by a 0.9% decline in concentrate sales.
Coca-Cola’s second-quarter results are expected to reflect gains from innovations and increased digital investments. E-commerce has surged, with growth rates doubling in many countries. KO has accelerated investments in digital capabilities, enhancing consumer connections and piloting digital initiatives to capture online demand, likely boosting second-quarter revenues.
CocaCola Company (The) Price and EPS Surprise
CocaCola Company (The) price-eps-surprise | CocaCola Company (The) Quote
Despite a favorable price/mix in most markets, macroeconomic challenges are expected to have affected KO’s quarterly performance. Factors such as low consumer confidence in China, geopolitical and economic instability in Eurasia and the Middle East, and high inflation in Argentina are expected to have weighed on Coca-Cola's top-line performance.
Coca-Cola has been witnessing notable volume pressure in key markets, highlighting ongoing challenges in sustaining broad-based growth. The company’s volumes have been particularly weak in North America and Mexico, both crucial revenue contributors. This raises concerns about demand resilience in mature markets and underscores the need for continued agility and localized execution. Our model estimates a 1% impact on second-quarter revenues from currency headwinds.
On the last reported quarter’s earnings call, management described the to-be-reported quarter as potentially “choppy.” This reflects multiple uncertainties, including tougher year-over-year comparisons, consumer sentiment fluctuations, ongoing geopolitical tensions and the risk of supply-chain disruptions, particularly in the United States, where shipping bottlenecks could ripple through adjacent industries. Additionally, uneven recovery patterns across developed markets like North America and Europe, combined with caution around currency volatility and tariff dynamics, contribute to a lack of clear near-term visibility. These are expected to have weighed on the company’s margins and bottom line.
Our model estimates a 10-bps decline in adjusted operating margin in the second quarter, with an adjusted EPS decline of 0.6% year over year.
Based on the current rates and impacts of hedged positions, the company anticipates currency headwinds to have hurt second-quarter 2025 revenues by 3%. Comparable EPS growth is likely to have included headwinds of 5-6% from currency. Our model estimates a 3% impact on second-quarter revenues from currency headwinds.
Coca-Cola’s Price Performance & Valuation
KO’s shares have exhibited an uptrend, rising as much as 13.4% year to date. The stock has surpassed the broader industry and the Consumer Staples sector’s 4.8% and 4.6% growth, respectively. The KO stock has also outperformed the S&P 500 index, which increased 6% in the same period.
KO Stock’s YTD Performance
Image Source: Zacks Investment Research
The Coca-Cola stock has outperformed its competitor, PepsiCo Inc. (PEP - Free Report) , which has declined 4.3% year to date. The stock has also outpaced Keurig Dr Pepper Inc. (KDP - Free Report) and Monster Beverage Corporation’s (MNST - Free Report) growth of 5.5% and 12.4%, respectively, in the same period.
From the valuation standpoint, KO trades at a forward 12-month P/E multiple of 22.77X, exceeding the industry average of 17.96X and the S&P 500’s average of 22.59X. Coca-Cola’s valuation appears quite pricey.
Image Source: Zacks Investment Research
KO undoubtedly commands a high valuation, reflecting its strong market positioning, brand power and long-term growth potential compared with other non-alcoholic beverage companies. However, we believe that its valuation is too stretched at this time.
Investment Thesis
Coca-Cola remains a powerhouse in the beverage industry, commanding more than 40% of the global non-alcoholic beverage market. The company’s enduring success is driven by a formidable market presence, world-class marketing capabilities and a relentless focus on innovation. With a portfolio boasting more than 4,700 products and over 500 brands, spanning sodas, juices, waters and energy drinks, Coca-Cola continues to reinforce its leadership.
KO’s dominant market share, broad product range and strategic emphasis on innovation and digital transformation position it well for sustained long-term growth. However, short-term headwinds such as inflationary pressures, global macroeconomic uncertainties and unfavorable currency fluctuations remain challenges to navigate.
Conclusion
Regardless of how Coca-Cola stock moves post its second-quarter results, the company remains a compelling long-term investment, backed by solid profitability and a growing global presence. Prospective investors should assess the current valuation before initiating a position, while existing shareholders may find it wise to stay invested. The upcoming earnings are likely to reinforce Coca-Cola’s resilience and sustained growth outlook.