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Coca-Cola (KO) Outpaces Stock Market Gains: What You Should Know

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Coca-Cola (KO - Free Report) closed at $49.25 in the latest trading session, marking a +1.32% move from the prior day. This move outpaced the S&P 500's daily gain of 0.21%. Meanwhile, the Dow gained 0.17%, and the Nasdaq, a tech-heavy index, added 0.27%.

Coming into today, shares of the world's largest beverage maker had gained 0.04% in the past month. In that same time, the Consumer Staples sector lost 2.51%, while the S&P 500 lost 5.26%.

Investors will be hoping for strength from KO as it approaches its next earnings release. In that report, analysts expect KO to post earnings of $0.62 per share. This would mark year-over-year growth of 1.64%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $9.58 billion, up 7.26% from the year-ago period.

KO's full-year Zacks Consensus Estimates are calling for earnings of $2.10 per share and revenue of $34.97 billion. These results would represent year-over-year changes of +0.96% and +9.79%, respectively.

It is also important to note the recent changes to analyst estimates for KO. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.05% higher within the past month. KO is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that KO has a Forward P/E ratio of 23.18 right now. For comparison, its industry has an average Forward P/E of 23.18, which means KO is trading at a no noticeable deviation to the group.

Meanwhile, KO's PEG ratio is currently 3.27. 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 2.11 based on yesterday's closing prices.

The Beverages - Soft drinks industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 164, which puts it in the bottom 36% 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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