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

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In the latest trading session, Coca-Cola (KO - Free Report) closed at $49.71, marking a +0.69% move from the previous day. This move lagged the S&P 500's daily gain of 2.3%. At the same time, the Dow added 2.5%, and the tech-heavy Nasdaq gained 2.95%.

Prior to today's trading, shares of the world's largest beverage maker had gained 3.65% over the past month. This has outpaced the Consumer Staples sector's gain of 1.34% and the S&P 500's gain of 1.21% in that time.

Wall Street will be looking for positivity from KO as it approaches its next earnings report date. This is expected to be February 15, 2019. In that report, analysts expect KO to post earnings of $0.42 per share. This would mark year-over-year growth of 7.69%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $7.06 billion, down 6.07% from the year-ago period.

KO's full-year Zacks Consensus Estimates are calling for earnings of $2.08 per share and revenue of $31.86 billion. These results would represent year-over-year changes of +8.9% and -10.04%, respectively.

Investors might also notice 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Within the past 30 days, our consensus EPS projection has moved 0.43% higher. KO is currently a Zacks Rank #3 (Hold).

Digging into valuation, KO currently has a Forward P/E ratio of 23.74. This represents a premium compared to its industry's average Forward P/E of 22.31.

Also, we should mention that KO has a PEG ratio of 3.23. 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. The Beverages - Soft drinks was holding an average PEG ratio of 2.19 at yesterday's closing price.

The Beverages - Soft drinks industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 181, which puts it in the bottom 30% 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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