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

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In the latest trading session, Coca-Cola (KO - Free Report) closed at $52.03, marking a -0.29% move from the previous day. This change lagged the S&P 500's 0.36% gain on the day. At the same time, the Dow added 0.01%, and the tech-heavy Nasdaq gained 0.27%.

Prior to today's trading, shares of the world's largest beverage maker had gained 2.07% over the past month. This has outpaced the Consumer Staples sector's gain of 1.24% and lagged the S&P 500's gain of 3.98% in that time.

Investors will be hoping for strength from KO as it approaches its next earnings release, which is expected to be July 23, 2019. The company is expected to report EPS of $0.62, up 1.64% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $9.68 billion, up 8.38% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.09 per share and revenue of $35.68 billion, which would represent changes of +0.48% and +11.99%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for KO. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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 remained stagnant. KO is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that KO has a Forward P/E ratio of 24.92 right now. This represents a premium compared to its industry's average Forward P/E of 23.54.

Investors should also note that KO has a PEG ratio of 3.57 right now. 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 2.33 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 231, which puts it in the bottom 10% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

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


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