Coca-Cola Company (NYSE:KO)
After a cautious tone was struck during the conference call, shares of Coca-Cola Company (NYSE:KO) retreated. Though executives claim that the company’s increased pricing had no effect on sales of its beverages in the last quarter of 2018, they anticipate slower growth in the coming quarters as inflation and price hikes lessen. There are still a lot of unknowns in the macro economy, CEO James Quincey said, citing things like economic policy, consumer demand, inflation, the supply chain, conflict, and geopolitics.
Quincey added an intriguing twist by claiming that coffee’s fundamental thesis had not changed throughout the years. He said the coffee industry was enormous and expanding. “Lots of money may be made from this. We have a huge possibility for the Coke system to expand if we can figure out how to get in. “A point which he made is as follows. According to Quincey, Coca-Cola is eager to see how well Jack Daniels and Coke fare together as part of the continuing alcohol studies. Starbucks (SBUX), Anheuser-Busch InBev (BUD), Molson Coors (TAP), Krispy Kreme (DNUT), J.M. Smucker (SJM), Keurig Dr. Pepper (KDP), Kraft Heinz (KHC), and Restaurant Brands International (RBU), which owns Tim Hortons, will all be watching the Atlanta-based company’s developments in the coffee and alcohol industries with interest.
Analysts’ opinions on Coca-Cola (KO) have been mainly positive.
Aarin Chiekrie, an analyst at Hargreaves Lansdown, noted underlying strength in the report and said Coca-Cola (KO) is demonstrating why it is a worldwide powerhouse.
“Despite having to deal with a cost of the living problem, the company managed to raise organic sales by 16% for the whole year, which was more than it had predicted. This was possible because of the group’s iconic brand strength; regulars continued returning for more of the group’s renowned carbonated beverages. Consequently, overall volumes increased by 5% this year even though average selling prices went up.”
Even while it puts a strain on the company’s finances, Coca-(KO) Cola’s diversification with Fanta, Sprite, Schweppes and the newly purchased BodyArmor brands is expected to provide development opportunities.
A Morgan Stanley analyst, Dara Mohsenian, said that KO’s small 1% EPS estimate hike at its midpoint was positive news compared to other mega-cap rivals that have traditionally been guiding below. According to analysts, Coca-Cola (KO) shows faith in its fundamentals by setting an organic sales growth estimate for FY23 higher than the long-term algorithm.
Although volume growth in Asia Pacific is considered a worry, Barclays analyst Lauren Lieberman noted that Coca-Cola (KO) produced a great end to the year operationally. Following the study, the company maintained its Overweight rating and $69 price objective for KO stock.
During Tuesday’s trading session, KO stock fell by 1.44%.
- Featured Image: The Guardian © Henry Mcdonald
