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On Thursday, Piper Sandler adjusted its outlook on Coca-Cola (NYSE:KO) shares, reducing the price target from $74.00 to $73.00. Despite this change, the firm maintained an Overweight rating on the beverage giant's stock. The revision comes as analysts at Piper Sandler updated their financial model to account for increased currency headwinds expected in 2025. According to InvestingPro data, Coca-Cola maintains a "GOOD" overall financial health score and has demonstrated impressive gross profit margins of 60.4%. InvestingPro analysis suggests the stock is currently trading near its Fair Value.
The firm now anticipates a -2.5% impact from currency fluctuations, a more significant challenge than the previously forecasted -1.2%. Coca-Cola has predicted low single-digit currency headwinds for 2025. Additionally, the company expects that the pricing pressures from inflationary markets will ease during the same year. One notable strength highlighted by InvestingPro is that Coca-Cola has raised its dividend for 54 consecutive years, demonstrating remarkable financial stability despite market fluctuations.
Coca-Cola has reported a +7.5% growth in U.S. measured retail sales, which aligns with Piper Sandler's +7.5% North American organic sales growth estimate. However, shipments have consistently outpaced retail sales data from IRI by approximately 4.5 percentage points over the last three quarters.
As a result of these adjustments, Piper Sandler has also revised its earnings per share (EPS) estimates for Coca-Cola. The forecast for 2025 has been decreased from $3.00 to $2.94, and for 2026 from $3.23 to $3.16. These changes are solely attributed to the anticipated currency headwinds.
The analyst highlighted that while currency concerns are notable for investors, the firm remains optimistic about Coca-Cola's fundamental business strength. The new price target of $73 still represents a valuation of approximately 23.0 times projected earnings. InvestingPro data reveals that the stock generally trades with low price volatility, with a beta of 0.61, making it an attractive option for stability-focused investors. Subscribers can access 8 additional ProTips and comprehensive valuation metrics in the Pro Research Report.
In other recent news, The Coca-Cola Company has been the focus of several important developments. The beverage giant reported third-quarter earnings per share (EPS) of $0.77, exceeding expectations, with organic sales growth reported at 9%, higher than the anticipated 6.3%. However, the company expects a decrease to approximately 6% organic sales growth in the fourth quarter. In terms of strategic business moves, Coca-Cola sold a 40% stake in its Indian bottler, Hindustan Coca-Cola Holdings Pvt Ltd, to the Jubilant Bhartia Group.
On the analyst front, Deutsche Bank (ETR:DBKGn) upgraded Coca-Cola's stock to Buy, recognizing the company's strong performance. Piper Sandler initiated coverage on Coca-Cola shares, assigning them an Overweight rating and setting a price target of $74.00, reflecting the firm's positive outlook on the beverage giant. The firm highlighted Coca-Cola's significant brand investment and expected pricing momentum, especially from emerging markets, as key factors in its favorable outlook.
In terms of leadership, Coca-Cola announced the retirement of board director Helene Gayle and appointed Henrique Braun as its new Executive Vice President and Chief Operating Officer. Lastly, Coca-Cola's Fairlife brand surpassed $1 billion in retail sales, significantly contributing to North American revenue. These are recent developments at The Coca-Cola Company.
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