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KO

Unraveling Coca-Cola (KO) – A Comprehensive Analysis

It's been a great afternoon session for Coca-Cola investors, who saw their shares rise 1.4% to a price of $68.87 per share. At these higher prices, is the company still fairly valued? If you are thinking about investing, make sure to check the company's fundamentals before making a decision.

a Very Low P/E Ratio but Trading Above Its Fair Price:

The Coca-Cola Company, a beverage company, manufactures and sells various nonalcoholic beverages in the United States and internationally. The company belongs to the Consumer Staples sector, which has an average price to earnings (P/E) ratio of 25.91 and an average price to book (P/B) ratio of 3.03. In contrast, Coca-Cola has a trailing 12 month P/E ratio of 24.4 and a P/B ratio of 10.37.

Coca-Cola has moved -2.1% over the last year compared to 18.6% for the S&P 500 — a difference of -20.6%. Coca-Cola has a 52 week high of $74.38 and a 52 week low of $60.62.

Positive Cash Flows:

2019 2020 2021 2022 2023 2024
Revenue (M) $37,266 $33,014 $38,655 $43,004 $45,754 $47,061
Gross Margins 61% 59% 60% 57% 60% 61%
Net Margins 24% 23% 25% 22% 23% 23%
Net Income (M) $8,920 $7,747 $9,771 $9,542 $10,714 $10,631
Net Interest Expense (M) $946 $1,437 $1,597 $882 $1,527 $1,656
Depreciation & Amort. (M) $1,365 $1,536 $1,452 $1,260 $1,128 $997
Diluted Shares (M) 4,314 4,323 4,340 4,350 4,339 4,320
Earnings Per Share $2.07 $1.79 $2.25 $2.19 $2.47 $2.46
EPS Growth n/a -13.53% 25.7% -2.67% 12.79% -0.4%
Avg. Price $44.84 $45.47 $50.87 $59.81 $58.01 $68.94
P/E Ratio 21.45 25.26 22.51 27.19 23.39 27.91
Free Cash Flow (M) $8,417 $8,667 $11,258 $9,534 $9,747 $4,741
CAPEX (M) $2,054 $1,177 $1,367 $1,484 $1,852 $2,064
EV / EBITDA 19.32 21.78 21.29 23.58 22.6 29.45
Total Debt (M) $36,022 $41,095 $40,792 $37,175 $39,467 $37,144
Net Debt / EBITDA 2.58 3.26 2.65 2.27 2.42 2.39
Current Ratio 0.76 1.32 1.13 1.15 1.13 1.03

Coca-Cola has growing revenues and a flat capital expenditure trend, positive EPS growth, and healthy leverage levels. However, the firm has positive cash flows. Finally, we note that Coca-Cola has just enough current assets to cover current liabilities, as shown by its current ratio of 1.03.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.

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