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Coca-Cola (KO) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
·3 min read

Coca-Cola (KO) closed the most recent trading day at $49.23, moving -1.85% from the previous trading session. This move lagged the S&P 500's daily loss of 0.38%. Meanwhile, the Dow lost 0.22%, and the Nasdaq, a tech-heavy index, lost 0.12%.

Heading into today, shares of the world's largest beverage maker had lost 5.47% over the past month, lagging the Consumer Staples sector's loss of 0.32% and the S&P 500's gain of 4.12% in that time.

KO will be looking to display strength as it nears its next earnings release, which is expected to be February 10, 2021. In that report, analysts expect KO to post earnings of $0.41 per share. This would mark a year-over-year decline of 6.82%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8.65 billion, down 4.64% from the year-ago period.

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. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

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 has moved 0.12% higher. KO currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that KO has a Forward P/E ratio of 23.96 right now. For comparison, its industry has an average Forward P/E of 21.47, which means KO is trading at a premium to the group.

Also, we should mention that KO has a PEG ratio of 5.7. 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 3.73 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 218, which puts it in the bottom 15% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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