Heading into today, shares of the world’s largest beverage maker had gained 2.91% over the past month, outpacing the Consumer Staples sector’s loss of 2.37% and the S&P 500’s gain of 2.89% in that time.
KO will be looking to display strength as it nears its next earnings release, which is expected to be July 21, 2021. The company is expected to report EPS of $0.55, up 30.95% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $9.4 billion, up 31.53% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $2.19 per share and revenue of $37.14 billion, which would represent changes of +12.31% and +12.5%, respectively, from the prior year.
Investors should also note any 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.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. KO is currently sporting a Zacks Rank of #3 (Hold).
In terms of valuation, KO is currently trading at a Forward P/E ratio of 25.7. For comparison, its industry has an average Forward P/E of 23.5, which means KO is trading at a premium to the group.
Meanwhile, KO’s PEG ratio is currently 3.38. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. Beverages – Soft drinks stocks are, on average, holding a PEG ratio of 2.54 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 209, which puts it in the bottom 18% 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.