The Coca-Cola Company
KO
$91.10
+0.66%
The Coca-Cola Company is the world's largest nonalcoholic beverage company, offering a portfolio of over 200 brands across carbonated soft drinks, water, sports, energy, juice, and coffee, sold in more than 200 countries. As a dominant player in the consumer defensive sector, Coca-Cola leverages its iconic brand, extensive distribution network, and marketing prowess to maintain a competitive moat. The current investor narrative centers on the company's ability to drive organic growth through premiumization and pricing power, as evidenced by recent earnings beats and raised full-year guidance, while also benefiting from a defensive rotation into consumer staples amid market volatility. Additionally, the stock's status as a reliable dividend payer and its inclusion in Berkshire Hathaway's portfolio continue to attract income-focused investors.…
KO
The Coca-Cola Company
$91.10
Related headlines
Investment Opinion: Should I buy KO Today?
We rate KO as a Hold, with a thesis that the stock offers a solid defensive profile and reliable income, but limited upside from current levels. The consensus rating is 'Buy' with an average target of $94.70, implying 7.97% upside, which is modest for a stock trading near its 52-week high.
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KO 12-Month Price Forecast
The AI model assesses KO as a bullish opportunity, given its strong fundamental momentum and defensive characteristics. The accelerating revenue growth and margin expansion provide a solid foundation, while the valuation remains reasonable relative to peers. However, the limited upside to analyst targets and potential macro headwinds temper enthusiasm. The stance would be upgraded if growth accelerates further or if the stock pulls back to a more attractive entry point, and downgraded if margins contract or revenue growth decelerates below 5%.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on The Coca-Cola Company's 12-month outlook, with a consensus price target around $94.70 and implied upside of +4.0% versus the current price.
Average Target
$94.70
0 analysts
Implied Upside
+4.0%
vs. current price
Analyst Count
—
covering this stock
Price Range
$75 - $104
Analyst target range
Coca-Cola has coverage from 23 analysts, with a consensus recommendation of 'Buy' (mean rating 1.75). The average target price is $94.70, implying an upside of 7.97% from the current price of $87.71. The distribution is bullish, with 15 Buy ratings, 7 Overweight, and 1 Hold, reflecting strong conviction in the company's growth prospects. The target price range is $75.00 (low) to $104.00 (high), indicating a wide spread of 38.7%, which suggests some uncertainty about the pace of growth and potential risks. The high target of $104 assumes continued strong pricing power and margin expansion, while the low target of $75 reflects concerns about a potential consumer slowdown or increased competition. Recent institutional actions have been positive, with firms like BofA, Barclays, and Citigroup reaffirming Buy or Overweight ratings, and no downgrades in the past three months, signaling a stable and optimistic outlook.
Bulls vs Bears: KO Investment Factors
Coca-Cola presents a balanced but slightly bullish case. The bull case is supported by accelerating revenue growth, expanding margins, and a reasonable valuation relative to history, while the bear case highlights limited upside to analyst targets and elevated debt. The most important tension is whether the company can sustain its pricing power and margin expansion in the face of potential consumer slowdown and competitive pressures. If growth continues as guided, the stock could re-rate higher; if not, the premium valuation could compress. Currently, the evidence slightly favors the bulls given the strong Q1 performance and raised guidance, but the modest upside warrants a cautious approach.
Bullish
- Accelerating Revenue Growth: Q1 2026 revenue grew 12.07% YoY to $12.47B, up from 5.6% growth in the prior-year quarter, driven by strong pricing and volume gains, especially in emerging markets. This acceleration supports the company's raised full-year guidance and signals robust demand.
- Expanding Profit Margins: Gross margin expanded to 62.96% in Q1 2026 from 60.05% in Q4 2025, while net margin jumped to 31.46% from 19.21% in the prior quarter. This reflects effective cost management and premiumization, boosting profitability and cash flow generation.
- Attractive Valuation vs. History: With a trailing PE of 22.92x, KO trades near the lower end of its 5-year range (19x-36x) and at an 8.3% discount to the industry average of 25x. This suggests the stock is not overvalued relative to its own history and peers, offering a margin of safety.
- Strong Analyst Conviction: 23 analysts rate KO a 'Buy' with a mean rating of 1.75, and the average target price of $94.70 implies 7.97% upside. Recent actions from BofA, Barclays, and Citigroup reaffirmed Buy/Overweight ratings, with no downgrades in the past three months.
Bearish
- Limited Upside to Analyst Targets: The average analyst target of $94.70 offers only 7.97% upside from the current price of $87.71, which is modest. The stock is trading near its 52-week high of $90.92, leaving little room for further appreciation unless estimates are revised upward.
- High Valuation Multiples: Despite the PE discount, KO's PS ratio of 6.27x and EV/EBITDA of 18.06x are elevated, reflecting a premium for its defensive qualities. The forward PE of 24.87x implies the market already prices in solid growth, leaving little margin for error.
- Elevated Debt Levels: Debt-to-equity stands at 1.47x, and interest expense was $375M in Q1 2026. While manageable, this leverage could constrain financial flexibility if interest rates remain high or if cash flows weaken, potentially impacting dividend growth.
- Dependence on Pricing Power: Revenue growth is heavily reliant on price increases rather than volume growth. If consumer spending weakens or competition intensifies, pricing power could erode, pressuring margins and growth, as seen in the low analyst target of $75.
KO Technical Analysis
KO is in a strong uptrend, with the stock price at $87.71, up 26.11% over the past year and 26.90% year-to-date. The current price sits at 96.5% of its 52-week range (low: $65.35, high: $90.92), indicating the stock is trading near its highs, reflecting robust momentum and investor confidence. This positioning suggests the market is rewarding the company's consistent performance, though it also implies limited upside from a purely technical perspective unless a breakout occurs.
Beta
0.34
0.34x market volatility
Max Drawdown
-8.5%
Largest decline past year
52-Week Range
$65-$92
Price range past year
Annual Return
+28.9%
Cumulative gain past year
| Period | KO Return | S&P 500 |
|---|---|---|
| 1m | +10.8% | +2.5% |
| 3m | +11.8% | +2.7% |
| 6m | +14.1% | +11.1% |
| 1y | +28.9% | +20.5% |
| ytd | +31.8% | +12.3% |
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KO Fundamental Analysis
Coca-Cola's revenue growth is accelerating, with Q1 2026 revenue of $12.47 billion, up 12.07% year-over-year, compared to 5.6% growth in the prior-year quarter. This acceleration is driven by strong pricing and volume growth across segments, particularly in emerging markets. The company's gross margin expanded to 62.96% in Q1 2026, up from 60.05% in Q4 2025, reflecting effective cost management and premiumization. Net income for Q1 2026 was $3.92 billion, with a net margin of 31.46%, up from 19.21% in Q4 2025, indicating strong profitability and operational efficiency.
Quarterly Revenue
$12.5B
2026-04
Revenue YoY Growth
+12.1%
YoY Comparison
Gross Margin
63.0%
Latest Quarter
Free Cash Flow
$12.6B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is KO Overvalued?
Given that Coca-Cola is profitable, the PE ratio is the primary valuation metric. The trailing PE is 22.92x, while the forward PE is 24.87x, indicating that the market expects earnings growth of approximately 8.5% over the next year. This forward premium suggests optimism about continued growth, supported by the company's raised guidance. Compared to the industry average PE of 25x (from valuation data), KO trades at a slight discount of 8.3%, which is justified by its stable cash flows and defensive nature. Historically, KO's PE has ranged from 19x to 36x over the past five years, with the current 22.92x sitting near the lower end of that range, suggesting the stock is not overvalued relative to its own history.
PE
22.9x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 19x~37x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
18.1x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks include a debt-to-equity ratio of 1.47x, with interest expense of $375M in Q1 2026, which could strain cash flows if rates rise. The payout ratio of 67% limits dividend growth flexibility, and the company's reliance on pricing power for growth could falter if volumes decline, impacting revenue and margins. Additionally, the forward PE of 24.87x implies high expectations, leaving little room for earnings misses.