Coca-Cola logged a 0.2% change during today's morning session, and is now trading at a price of $56.85 per share.
Over the last year, Coca-Cola logged a -3.0% change, with its stock price reaching a high of $64.99 and a low of $51.55. Over the same period, the stock underperformed the S&P 500 index by -19.0%. As of April 2023, the company's 50-day average price was $56.52. The Coca-Cola Company, a beverage company, manufactures, markets, and sells various nonalcoholic beverages worldwide. Based in Atlanta, GA, the large-cap Consumer Staples company has 82,500 full time employees. Coca-Cola has offered a 3.2% dividend yield over the last 12 months.
The Company May Be Profitable, but Its Balance Sheet Is Highly Leveraged:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $34,300 | $37,266 | $33,014 | $38,655 | $43,004 | $44,140 |
| Gross Margins | 62% | 61% | 59% | 60% | 57% | 59% |
| Operating Margins | 27.0% | 28.0% | 30.0% | 32.0% | 27.0% | 28.0% |
| Net Margins | 19.0% | 24.0% | 24.0% | 25.0% | 22.0% | 24.0% |
| Net Income (MM) | $6,476 | $8,985 | $7,768 | $9,804 | $9,571 | $10,512 |
| Net Interest Expense (MM) | $950 | $946 | $1,437 | $2,000 | $882 | $1,248 |
| Depreciation & Amort. (MM) | $1,086 | $1,365 | $1,536 | $1,452 | $1,260 | $1,181 |
| Earnings Per Share | $1.5 | $2.07 | $1.79 | $2.25 | $2.19 | $2.42 |
| Diluted Shares (MM) | 4,299 | 4,314 | 4,323 | 4,340 | 4,350 | 4,326 |
| Free Cash Flow (MM) | $389 | $8,417 | $8,667 | $11,258 | $9,534 | $9,489 |
| Capital Expenditures (MM) | $1,548 | $2,054 | $1,177 | $1,367 | $1,484 | $1,612 |
| Net Current Assets (MM) | -$14,165 | -$17,484 | -$5,651 | -$6,733 | -$6,084 | -$5,981 |
| Long Term Debt (MM) | $25,376 | $27,516 | $40,125 | $38,116 | $36,377 | $35,626 |
| Net Debt / EBITDA | 4.36 | 3.92 | 4.18 | 3.44 | 3.45 | 3.19 |
Coca-Cola has growing revenues and a flat capital expenditure trend and wider gross margins than its peer group. Additionally, the company's financial statements display decent operating margins with a stable trend and positive EPS growth. However, the firm has a highly leveraged balance sheet. Finally, we note that Coca-Cola has irregular cash flows.
Coca-Cola's Valuation Is in Line With Its Sector Averages:
Coca-Cola has a trailing twelve month P/E ratio of 22.9, compared to an average of 24.36 for the Consumer Staples sector. Based on its EPS guidance of $2.62, the company has a forward P/E ratio of 21.6. The company doesn't issue forward earnings guidance, and the compound average growth rate of its last 6 years of reported EPS is 8.3%. On this basis, the company's PEG ratio is 2.76, which suggests that it is overpriced. Furthermore, Coca-Cola is likely overvalued compared to the book value of its equity, since its P/B ratio of 9.34 is higher than the sector average of 4.29. The company's shares are currently trading 213.6% above their Graham number.
Coca-Cola Has an Average Rating of Buy:
The 21 analysts following Coca-Cola have set target prices ranging from $55.64 to $70.73 per share, for an average of $61.97 with a buy rating. As of April 2023, the company is trading -8.8% away from its average target price, indicating that there is an analyst consensus of some upside potential.
Coca-Cola has a very low short interest because 0.6% of the company's shares are sold short. Institutions own 71.5% of the company's shares, and the insider ownership rate stands at 0.67%, suggesting a small amount of insider investors. The largest shareholder is Berkshire Hathaway, Inc, whose 9% stake in the company is worth $22,744,000,244.
