Street Calls of the Week
On Friday, Piper Sandler increased its price target for Coca-Cola (NYSE: NYSE:KO) shares, setting the new target at $80, up from the previous $73, while maintaining an Overweight rating on the stock. According to InvestingPro data, the stock is currently trading near its 52-week high of $73.53, with an impressive year-to-date return of 13.83%. The company’s market capitalization stands at $304.81 billion, reflecting its position as a prominent player in the beverages industry. The firm’s analyst highlighted Coca-Cola’s robust near-term momentum, anticipating a 5-6% organic revenue growth for 2025. The company is also expected to maintain a solid long-term growth algorithm of 4-6% in organic revenue. Supporting this outlook, InvestingPro analysis shows the company maintains impressive gross profit margins of 61.06% and has consistently raised its dividend for 54 consecutive years, currently offering a yield of 2.88%.
Coca-Cola’s current growth is attributed to several factors, including strong industry growth momentum and competitive advantages that are anticipated to lead to significant market share gains. The company’s strategic ’All-Weather’ approach is designed to cater to all beverage occasions, supported by consumer and customer-centric marketing strategies. Additionally, Coca-Cola has been successful in growing transactions at a faster rate than volumes, indicating a shift towards more single-serve packages, which enhances product mix and profitability.
The analyst from Piper Sandler expressed confidence in Coca-Cola’s fundamental position within the market. The firm’s 2025 estimated earnings per share (EPS) remain at $2.95, with a 2026 EPS estimate of $3.17. The revised price target reflects the use of a higher earnings multiple of approximately 25.0 times the projected 2026 EPS, up from the prior multiple of about 23.0 times. This adjustment was made to align Coca-Cola’s valuation more closely with its peers and to account for the company’s strong growth expectations. For deeper insights into Coca-Cola’s valuation and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro, which includes detailed analysis of the company’s financial health, peer comparisons, and expert insights.
In other recent news, Coca-Cola has reported significant developments that are drawing attention from investors. The company has announced a robust fourth-quarter performance for 2024, with organic sales growth of 14%, surpassing the consensus forecast of 7%. This strong performance was supported by better-than-expected pricing and concentrate sales, leading to an earnings per share (EPS) of $0.55, exceeding the anticipated $0.52. Jefferies and Citi analysts have maintained a Buy rating on Coca-Cola, with Jefferies raising the price target to $79 and Citi setting it at $85, following the impressive results.
Additionally, Erste Group has upgraded Coca-Cola’s stock rating from Hold to Buy, citing optimistic growth projections and strong profitability. The company has also raised its quarterly dividend by 5.2% to 51 cents per share, marking the 63rd consecutive year of dividend growth. Coca-Cola’s 2025 guidance includes an organic sales growth projection of 5-6% and EPS growth of 2-3%, with expectations of 8-10% growth excluding foreign exchange impacts. Analysts are noting Coca-Cola’s ability to maintain a strong market position and deliver above-peer growth in the consumer staples sector. These developments highlight Coca-Cola’s strategic initiatives and consistent shareholder value delivery, reflecting its resilience and potential for continued success.
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