Coca-Cola (KO) Gains But Lags Market: What You Should Know

Coca-Cola (KO) closed at $53.83 in the latest trading session, marking a +0.47% move from the prior day. This move lagged the S&P 500's daily gain of 0.91%. At the same time, the Dow added 0.7%, and the tech-heavy Nasdaq gained 1.02%.

Prior to today's trading, shares of the world's largest beverage maker had lost 1.51% over the past month. This has was narrower than the Consumer Staples sector's loss of 2.39% and the S&P 500's loss of 2.74% in that time.

KO will be looking to display strength as it nears its next earnings release, which is expected to be October 18, 2019. In that report, analysts expect KO to post earnings of $0.56 per share. This would mark a year-over-year decline of 3.45%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $9.48 billion, up 15.02% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.10 per share and revenue of $36.81 billion, which would represent changes of +0.96% and +15.56%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for KO. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

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 remained stagnant. KO currently has a Zacks Rank of #3 (Hold).

In terms of valuation, KO is currently trading at a Forward P/E ratio of 25.47. Its industry sports an average Forward P/E of 21.24, so we one might conclude that KO is trading at a premium comparatively.

Also, we should mention that KO has a PEG ratio of 3.73. 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. KO's industry had an average PEG ratio of 2.55 as of yesterday's close.

The Beverages - Soft drinks industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 187, putting it in the bottom 27% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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