Truist maintains Coca-Cola stock Buy rating and $80 target

On Tuesday, Truist Securities reiterated its Buy rating and $80.00 price target on Coca-Cola (NYSE:KO) stock. The reaffirmation followed the company’s first-quarter results for the year 2025, which showcased revenue slightly below Truist’s expectations but aligned with the general consensus, and an adjusted earnings per share (EPS) that met both Truist and consensus estimates. According to InvestingPro data, Coca-Cola maintains impressive gross profit margins of 61% and has achieved a "GOOD" overall financial health score, though the stock currently appears overvalued relative to its Fair Value. Coca-Cola reported net sales of $11.216 billion, compared to Truist’s estimate of $11.259 billion and the consensus estimate of $11.146 billion. The adjusted EPS stood at $0.73, in line with the $0.72 estimated by both Truist and the consensus.

The company experienced a 6% year-over-year organic revenue growth, with all regions contributing to the increase. Latin America led with a robust 13% growth in organic sales. The overall company’s organic sales growth was attributed to a 5% rise in pricing and a 1% increase in concentrate sales. Coca-Cola confirmed its full-year 2025 organic sales guidance of 5% to 6% and adjusted EPS guidance of a 2% to 3% increase. The company’s strong market position is reflected in its consistent dividend payments, having raised dividends for 54 consecutive years - just one of many insights available through InvestingPro’s comprehensive analysis tools.

Coca-Cola’s stock performance has been notably strong, with a recent uptick of 5.3% compared to the S&P 500 Consumer Staples Sector’s (XLP) 0.6% since the fourth quarter of 2024 earnings release. The company’s stock is expected to open flat to up, based on the in-line financial results and consistent guidance, despite the robust recent performance.

Truist Securities highlighted that Coca-Cola’s results were solid, especially in contrast to the earnings misses and lowered guidance from industry peers this season, such as Procter & Gamble (NYSE:PG) and PepsiCo (NASDAQ:PEP). The firm believes Coca-Cola’s recent stock success reflects its status as a leading global beverage company, capable of weathering macroeconomic and geopolitical challenges. The company’s geographically diverse portfolio, with North America accounting for approximately 16% of total volumes, and localized supply chains, are seen as key factors in its resilience against recent US trade policy shifts and weak consumer sentiment. Truist anticipates that Coca-Cola shares will remain attractive to investors looking for stability in uncertain market conditions.

In other recent news, Coca-Cola reported its first-quarter 2025 earnings, revealing an earnings per share (EPS) of $0.73, slightly above the consensus estimate of $0.72, though revenue fell short of expectations at $11.1 billion compared to the anticipated $11.2 billion. Morgan Stanley (NYSE:MS) reiterated its Overweight rating for Coca-Cola, emphasizing the company’s robust market position, strong pricing power, and a 7% organic sales growth in the first quarter. BofA Securities maintained a Buy rating, noting Coca-Cola’s impressive 6% organic sales growth, which exceeded both its and consensus estimates. However, Goldman Sachs held a Neutral rating due to ongoing tax litigation with the IRS, highlighting a potential $12 billion liability that poses financial risks. Barclays (LON:BARC) also maintained an Overweight rating, despite a slight downward revision in full-year EPS forecasts, citing Coca-Cola’s strong performance in Asia Pacific and resilient market strategies. These developments underline Coca-Cola’s mixed financial performance and the cautious optimism among analysts regarding its market positioning and future prospects.

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