Coca-Cola, the world’s largest soft drink manufacturer is expected to report its fourth-quarter earnings of $0.41 per share, which represents a year-over-year decline of over 12% from $0.47 per share seen in the same period a year ago.
However, the most popular and biggest-selling soft drink maker would post revenue growth of nearly 4% to $8.94 billion. It is worth noting that the company has consistently beaten consensus earnings estimates in the last two years, at least.
The company raised its 2021 organic revenue and comparable earnings per share (EPS) growth guidance. For 2021, it expects organic revenue growth of 13-14%, compared with the previous forecast of 12-14% growth. The company estimates an underlying effective tax rate of 18.6% for 2021, down from the previous estimate of 19.1%, according to ZACKS Research.
It estimates year-over-year comparable EPS growth of 15-17%, rather than the 12-14% growth rate expected earlier, ZACKS added.
Coca-Cola stock traded 0.70% higher at $62.03 on Tuesday. The stock rose nearly 5% so far this year after surging about 8% in 2021.
Analyst Comments
“We expect a Q4 topline beat for Coke with Thursday’s Q4 EPS to be well-received, similar to upside in each of the first three quarters of 2021, and we expect Coke to guide above or towards the higher end of consensus, with expected 6-8% organic sales growth guidance for FY22 (consensus is ~6.4%) and HSD % EPS growth inclusive of a 2-3% negative FX impact, above the 6% consensus, which includes FX. With FX pressure and Omicron uncertainty, Coke’s guidance range could be more like MSD-HSD % growth on EPS, although we would expect this guidance to ultimately prove conservative,” noted Dara Mohsenian, equity analyst at Morgan Stanley.
“Short term, we see an above-consensus post-COVID topline/EPS recovery, and longer-term, we see a return to pre-COVID outsized sales growth vs. peers, improved execution with a reorganization, and better margin performance than peers with a less onerous price/cost gap.”
Coca-Cola Stock Price Forecast
Eleven analysts who offered stock ratings for Coca-Cola in the last three months forecast the average price in 12 months of $65.18 with a high forecast of $71.00 and a low forecast of $55.00.
The average price target represents a 5.11% change from the last price of $62.01. Of those 11 analysts, nine rated “Buy”, two rated “Hold” while none rated “Sell”, according to Tipranks.
Morgan Stanley gave the base target price to $71 with a high of $82 under a bull scenario and $40 under the worst-case scenario. The investment bank gave an “Overweight” rating on the soft drink company’s stock.
Several analysts have also updated their stock outlook. JP Morgan raised the target price to $64 from $63. Credit Suisse lifted the target price to $66 from $63. Jefferies increased the target price to $63 from $60. CFRA upped the target price by $10 to $68.
Technical analysis suggests it is good to hold for now as 100-day Moving Average and 100-200-day MACD Oscillator gives mixed signals.
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This article was originally posted on FX Empire
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