Yahoo Finance The Coca-Cola Company Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions
The Coca-Cola Company (NYSE:KO) just released its first-quarter report and things are looking bullish. Results were good overall, with revenues beating analyst predictions by 2.4% to hit US$11b. Statutory earnings per share (EPS) came in at US$0.74, some 8.5% above whatthe analysts had expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
View our latest analysis for Coca-Cola
Taking into account the latest results, Coca-Cola's 19 analysts currently expect revenues in 2024 to be US$45.7b, approximately in line with the last 12 months. Statutory earnings per share are predicted to grow 10% to US$2.76. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$45.7b and earnings per share (EPS) of US$2.74 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$66.96. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Coca-Cola, with the most bullish analyst valuing it at US$74.00 and the most bearish at US$60.00 per share. This is a very narrow spread of estimates, implying either that Coca-Cola is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 1.1% by the end of 2024. This indicates a significant reduction from annual growth of 6.5% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.0% per year. It's pretty clear that Coca-Cola's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Coca-Cola's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$66.96, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Coca-Cola. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Coca-Cola going out to 2026, and you can see them free on our platform here..
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Coca-Cola , and understanding them should be part of your investment process.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.