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Coca-Cola Stock Downgraded to “Buy” as CFRA Adjusts Price Target
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Coca-Cola, the global beverage giant, saw its stock rating downgraded from a “Strong Buy” to a “Buy” by financial research firm CFRA. The firm also revised its 12-month price target for the stock, lowering it from $68.00 to $66.00. This decision comes as Coca-Cola reported a strong performance in its fourth-quarter earnings, with adjusted earnings per share (EPS) of $0.49, surpassing expectations. The company also recorded a 7% increase in quarterly revenue, reaching $10.85 billion.
Coca-Cola’s revenue growth was primarily driven by its impressive performance in price/mix and concentrate sales, despite facing some challenges. Notably, the company experienced significant growth in Latin America, with a remarkable 16% surge in net revenue for that segment. Coca-Cola also managed to enhance its gross margin, achieving a notable increase of 190 basis points to 57.3%.
Looking ahead, Coca-Cola has set its adjusted EPS growth guidance for 2024 at 4%-5%, indicating a projected EPS range of $2.80-$2.82. This aligns with the current consensus estimate of $2.81. Despite the downgrade, CFRA has maintained its adjusted EPS estimates for Coca-Cola at $2.85 for 2024 and $3.00 for 2025, expressing confidence in the company’s future performance.
One of the strengths of Coca-Cola lies in its excellent financial health and operational efficiency. The company boasts a perfect Piotroski Score of 9, which underscores its robustness in these areas. Furthermore, Coca-Cola has a long-standing tradition of increasing dividends, having raised them for 53 consecutive years. This demonstrates the company’s commitment to delivering shareholder returns and its ability to generate strong cash flow.
Coca-Cola’s significant market presence is evident from its market capitalization of $258.11 billion. The company’s price-to-earnings (P/E) ratio stands at 23.9, with a slightly lower adjusted P/E ratio of 22.02 for the last twelve months, as of Q3 2023. These figures emphasize Coca-Cola’s solid profitability.
It is worth noting that this analysis was conducted with the assistance of artificial intelligence and thoroughly reviewed by an editor to ensure accuracy and reliability.
Analyst comment
Neutral news.
As an analyst, the market is likely to remain stable with minor fluctuations in response to CFRA’s downgrade and revised price target. Coca-Cola’s positive performance in fourth-quarter earnings and projected EPS growth for 2024 suggest continued stability and potential for future growth. The company’s strong financial health, operational efficiency, and market presence contribute to its solid profitability.
