The Coca-Cola Company
KO
$86.87
-0.21%
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, global distribution network, and marketing prowess to maintain leadership in the beverage industry. The current investor narrative centers on the company's ability to drive consistent earnings growth through pricing power and portfolio innovation, as evidenced by its recent Q2 earnings beat and raised full-year guidance. Additionally, Coca-Cola's status as a Dividend King with a 64-year dividend growth streak has made it a favored defensive play amid market volatility and rotation away from high-growth tech stocks.…
KO
The Coca-Cola Company
$86.87
Related headlines
KO 12-Month Price Forecast
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 +9.0% versus the current price.
Average Target
$94.70
0 analysts
Implied Upside
+9.0%
vs. current price
Analyst Count
—
covering this stock
Price Range
$75 - $104
Analyst target range
Coca-Cola is covered by 23 analysts, with a consensus recommendation of 'Buy' and a mean recommendation score of 1.75 (where 1 is Strong Buy and 5 is Sell). The average price target is $94.70, implying an upside of approximately 9.0% from the current price of $86.85. The analyst sentiment is bullish, with recent actions from major firms like B of A Securities, Barclays, Citigroup, and JP Morgan all maintaining Buy or Overweight ratings. The target price range spans from a low of $75.00 to a high of $104.00, indicating a wide dispersion in expectations. The high target of $104 assumes continued strong pricing power and margin expansion, while the low target of $75 reflects concerns about potential volume declines or economic headwinds. The relatively wide spread suggests moderate uncertainty, but the overall bullish consensus and recent upgrades support a positive outlook for the stock.
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Bulls vs Bears: KO Investment Factors
Coca-Cola presents a balanced but slightly bullish case. The company's accelerating revenue growth, robust margins, and defensive characteristics provide strong fundamental support, while its valuation is reasonable relative to its own history. However, high debt levels and dependence on pricing power introduce risks that could temper returns. The most critical tension is whether the company can sustain its pricing-driven growth in a potentially weakening consumer environment, which would determine if the current valuation is justified. Overall, the evidence slightly favors the bull case, given the company's proven resilience and consistent execution.
Bullish
- Accelerating Revenue Growth: Q1 2026 revenue grew 12.07% YoY to $12.47B, up from 6.5% growth in Q4 2025, indicating strong momentum across geographies and categories. This acceleration is driven by effective pricing and portfolio innovation, supporting continued earnings growth.
- Strong Profitability and Margins: Gross margin stands at 61.6%, operating margin at 28.7%, and net margin at 27.3%, reflecting Coca-Cola's pricing power and operational efficiency. These metrics are well above industry averages, providing a solid foundation for shareholder returns.
- Defensive Characteristics with Low Beta: With a beta of 0.342, KO is significantly less volatile than the market, making it an ideal defensive anchor. The stock has outperformed the S&P 500 over the past year (+24.95% vs +21.46%), and its relative strength is positive across most timeframes.
- Attractive Valuation Relative to History: Trailing P/E of 22.92x is near the lower end of its historical range (19.09x-36.58x), and the PEG ratio of 0.98 suggests the stock is fairly valued relative to its growth. This provides a margin of safety for long-term investors.
Bearish
- Elevated Valuation vs. Market: Despite being below its historical average, KO's P/E of 22.92x is higher than the broader market's average, and its forward P/E of 24.63x is above the trailing multiple, suggesting limited near-term upside. The stock trades at a premium to many consumer staples peers.
- High Debt Levels: Debt-to-equity ratio of 1.41 indicates significant leverage, which could strain cash flows if interest rates remain high. Interest expense of $375M in Q1 2026 is a notable drag on earnings, and rising rates could pressure margins.
- Dependence on Pricing Power: Revenue growth is heavily reliant on price increases rather than volume growth, which may be unsustainable if consumer demand weakens. Any resistance to price hikes could slow growth and compress margins.
- Modest Growth Prospects: With a PEG ratio of 0.98 and estimated EPS growth of around 4-5%, KO offers limited capital appreciation potential compared to growth stocks. The stock's total return is likely to be driven primarily by dividends, which may not satisfy aggressive investors.
KO Technical Analysis
Coca-Cola's stock is in a clear uptrend, with a 1-year price change of +24.95% and a YTD gain of +25.65%. The current price of $86.85 sits near the upper end of its 52-week range, at approximately 95.5% of the range (calculated as (86.85 - 65.35) / (90.92 - 65.35) * 100). This positioning near the 52-week high of $90.92 indicates strong momentum and investor confidence, though it also suggests the stock may be approaching overbought territory. The stock's beta of 0.342 indicates it is significantly less volatile than the broader market, making it a defensive anchor in portfolios.
Beta
0.34
0.34x market volatility
Max Drawdown
-8.5%
Largest decline past year
52-Week Range
$65-$91
Price range past year
Annual Return
+23.5%
Cumulative gain past year
| Period | KO Return | S&P 500 |
|---|---|---|
| 1m | +4.0% | +2.4% |
| 3m | +8.5% | +4.7% |
| 6m | +10.5% | +11.7% |
| 1y | +23.5% | +21.3% |
| ytd | +25.7% | +13.4% |
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KO Fundamental Analysis
Coca-Cola's revenue growth is accelerating, with the most recent quarter (Q1 2026) reporting revenue of $12.47 billion, a 12.07% YoY increase, up from the prior year's Q1 revenue of $11.13 billion. This marks a notable acceleration from the 6.5% growth seen in Q4 2025 (revenue of $11.82 billion vs. $11.54 billion in Q4 2024). The company's diversified portfolio, including strong performance in the Pacific segment (revenue of $11.09 billion) and bottling investments ($1.64 billion), is driving this growth. The revenue trajectory suggests robust demand across geographies and categories, supported by effective pricing strategies and innovation.
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 Coca-Cola's positive net income, the trailing P/E ratio of 22.92x is the primary valuation metric, with a forward P/E of 24.63x. The forward P/E being higher than the trailing P/E suggests that the market expects earnings to decline slightly or that the current earnings include one-time gains; however, the gap is modest, indicating stable earnings expectations. Compared to the industry average P/E of 25x (based on available data), Coca-Cola trades at a slight discount of approximately 8%, which is notable given its superior brand strength and consistent cash flows. Historically, Coca-Cola's P/E has ranged from 19.09x to 36.58x over the past several quarters, with the current 22.92x near the lower end of that range, suggesting the stock is relatively undervalued compared to its own historical valuation norms.
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
18.0x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Coca-Cola's debt-to-equity ratio of 1.41 indicates a high level of leverage, which could become problematic if interest rates rise further or if cash flows weaken. Interest expense of $375M in Q1 2026 represents a significant fixed cost, and the company's reliance on pricing power to drive growth may face consumer pushback in an inflationary environment. Additionally, the payout ratio of 67% leaves limited room for dividend increases if earnings decline, potentially disappointing income investors.
