Cardiff Oncology shares plunge after Q2 earnings miss
On Tuesday, Morgan Stanley (NYSE:MS) reiterated its Overweight rating and $78.00 price target for Coca-Cola (NYSE:KO) shares, representing potential upside from the current price of $71.87. The firm’s analysts cited Coca-Cola’s strong first-quarter performance and steady full-year guidance as evidence of the company’s robust market position compared to its peers. According to InvestingPro data, Coca-Cola’s market capitalization stands at $310.16 billion, with the stock delivering an impressive 16.16% return year-to-date. InvestingPro analysis suggests the stock is currently trading above its Fair Value. They highlighted Coca-Cola’s significant pricing power, evident in the 5% year-over-year pricing increase in the first quarter, which surpassed the average 1.5% pricing growth of other mega-cap companies.
Coca-Cola’s organic sales growth (OSG) in the first quarter was 7%, outpacing the 1% average of its mega-cap counterparts. This growth is attributed to a combination of unit case volume growth and positive price/mix effects. Despite geopolitical challenges, the company reported a surprising 2% increase in unit case volumes. Additionally, the analysts noted the growing contribution of Fairlife to Coca-Cola’s success.
Coca-Cola’s first-quarter earnings surpassed expectations, with an adjusted EPS of $0.73, ahead of the $0.72 consensus. The company also reported a revenue beat of 0.6%, a 1.3% gross profit beat, and a 2.7% operating profit beat. The reported OSG, calculated using concentrate shipments, saw a 6% increase, which was above the consensus range of 4.7% to 5.1%. Concentrate volumes were up by 1%, defying the consensus expectation of a 0.5% decrease.
The company’s unchanged full-year EPS guidance stands out positively against the backdrop of negative revisions seen among peers. Morgan Stanley analysts pointed out that Coca-Cola’s guidance is conservative, especially with FX-neutral assumptions being lowered by 100 basis points. InvestingPro highlights that Coca-Cola has maintained dividend payments for 55 consecutive years, with a current dividend yield of 2.84%. The company’s overall financial health score is rated as GOOD, reflecting its strong market position and consistent performance. This conservative stance is seen as a strategic move by Coca-Cola, which likely aims to avoid raising overall EPS guidance in the current challenging environment and so early in the fiscal year.
Coca-Cola’s gross margins also showed improvement, beating consensus by 40 basis points and marking a 30 basis points year-over-year increase. Selling, General & Administrative (SG&A) expenses as a percentage of sales were 30 basis points lower than the consensus, with SG&A dollar expenses aligning with expectations. The analysts concluded that Coca-Cola’s robust first-quarter performance and conservative yet unchanged full-year guidance signal a strong positioning for the company moving forward.
In other recent news, Coca-Cola reported its first-quarter earnings for 2025, showing a slight beat on earnings per share (EPS) but a miss on revenue expectations. The company posted an EPS of $0.73, surpassing the forecast of $0.72, while its revenue of $11.1 billion fell short of the anticipated $11.2 billion. Barclays (LON:BARC) maintained an Overweight rating on Coca-Cola with a $73 target, emphasizing confidence in the company’s organic revenue growth of 6%. Meanwhile, BofA Securities reiterated a Buy rating with a $77 target, noting Coca-Cola’s strong first-quarter performance and organic sales growth that outpaced expectations.
Goldman Sachs maintained a Neutral rating with a $65 target, citing concerns over ongoing tax litigation with the IRS, which could potentially result in a $12 billion liability. Despite these concerns, Coca-Cola continues to project organic revenue growth of 5-6% for the full year 2025. The company is also navigating challenges, such as foreign exchange headwinds and potential consumer boycotts, which have affected volume growth in North America. Nonetheless, Coca-Cola’s strong performance in the Asia Pacific region, particularly in India and China, highlights its resilience in key markets.
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