Why Coca Cola Stock Is Down Several factors hit Coca Cola during the coronavirus pandemic, but to fully understand it, you need to know its revenue sources. Much of the company’s revenue comes from selling concentrated syrups wholesale to regional bottling facilities, which largely operate as franchises.
Full Answer
Is Coca-Cola's stock undervalued?
Based on its current market price and future growth prospects, Coca-Cola (NYSE: KO) looks undervalued at present. Trefis has a price estimate of $57 per share for Coca-Cola’s stock, higher than its current market price of $53 (as on November 19, 2019), which reflects an upside of 7.5%.
Is Coca-Cola’s stock headed to $57?
Trefis has a price estimate of $57 per share for Coca-Cola’s stock, higher than its current market price of $53 (as on November 19, 2019), which reflects an upside of 7.5%.
Why is Coca-Cola’s revenue declining?
Coca-Cola’s revenue has declined over the last two years, from $41.9 billion in 2016 to $31.9 billion in 2018, mainly due to the loss of revenue from extensive refranchising of its bottling operations (converting company-owned bottling plants to new franchisees, which leads to lower revenue but higher margin due to a sharper decline in cost).
What to expect from Coca-Cola’s earnings in 2019?
EPS is expected to see a rise from $1.50 per share in 2018 to $1.80/share in 2019 and $1.91/share in 2020, driven by higher net income As per Coca-Cola’s Valuation by Trefis, we have a price estimate of $57 per share for Coca-Cola’s stock.
Is Coca Cola stock undervalued?
An Intrinsic Calculation For The Coca-Cola Company (NYSE:KO) Suggests It's 29% Undervalued.
Is Ko overpriced?
No, KO stock isn't overvalued. Given the peace of mind that comes with keeping KO stock in your portfolio, many investors would consider buying if share prices were even higher than they are today.
What is the intrinsic value of Coca Cola stock?
As of today (2022-07-03), Coca-Cola Co's Intrinsic Value: Projected FCF is $20.87. The stock price of Coca-Cola Co is $64.38. Therefore, Coca-Cola Co's Price-to-Intrinsic-Value-Projected-FCF of today is 3.1.
What problems is Coca Cola facing?
The problems faced by Coca-Cola Company are high sugar harmful to health, increase in competitors, plastic bottle waste and water scarcity. These issues will lead to many negative impacts to social and natural environment.
Is Coca-Cola a good buy right now?
For the current quarter, Coke is expected to post earnings of $0.68 per share, indicating no change from the year-ago quarter. The Zacks Consensus Estimate has changed -1.5% over the last 30 days. The consensus earnings estimate of $2.47 for the current fiscal year indicates a year-over-year change of +6.5%.
Is investing in Coca-Cola stock a good idea?
The company's dividend is arguably its most famous investment trait. Longtime shareholders have enjoyed decades of dividend payments that increase every year. Coca-Cola is a Dividend King that has increased its payout for 60 consecutive years, one of the longest streaks of any public company.
What is intrinsic value of stock?
Intrinsic value of a stock is its true value. This is calculated on the basis of the monetary benefit you expect to receive from it in the future. Let us put it this way – it is the maximum value at which you can buy the asset, without making a loss in the future when you sell it.
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What was the failure of Coca-Cola?
New Coke didn't only fail because it tasted too sweet — it failed because the marketing campaigns, business structures, and company culture at Coke doomed it from the beginning.
Why are Coke products in short supply?
Beverages, especially cans, in short supply due to lack of materials and global demand. Experts weigh in on the lack of aluminum and other supply chain issues. In a story first reported by the Washington Post, major supply chain issues are affecting such products as soda, water and alcohol.
Is Coca-Cola in financial trouble?
Coca-Cola earnings beat estimates as demand for drinks away from home tops pre-pandemic levels. Coca-Cola earnings and revenue topped Wall Street's estimates, but the company's 2022 forecast was weaker than expected.
How much did Coca Cola lose in 2020?
Coca-Cola revenues declined more than 20% from $41.9 billion in 2016 to $33 billion in 2020, primarily led by refranchising (franchise owners record revenues from bottling plants, while Coca-Cola earns fees from these franchisees) of its bottling plants as well as the impact of lockdowns during the pandemic in 2020.
How much did Ko stock drop in 2009?
We see KO stock declined from levels of around $29 in September 2007 (pre-crisis peak) to levels of around $20 in March 2009 (as the markets bottomed out), implying KO stock lost 29% from its approximate pre-crisis peak. It recovered post the 2008 crisis, to levels of about $29 in early 2010, rising by 40% between March 2009 and January 2010. The S&P 500 Index saw a decline of 51%, falling from levels of 1,540 in September 2007 to 757 in March 2009. It then rallied to levels of 1,124, rising by about 48% between March 2009 and January 2010.
How much debt does Ko have?
KO’s total debt increased from $33 billion in 2016 to $42.5 billion in 2020, while its total cash decreased from around $12.6 billion to $6.8 billion over the same period. The company generated over almost $10 billion in cash from its operations in 2020, which puts it in a reasonably comfortable position to deal with the current crisis.
Metrics Analysis
KO has a trailing twelve month Price to Earnings ( PE) ratio of 27.4. The historical average of roughly 15 shows a poor value for KO stock as investors are paying higher share prices relative to the company's earnings. KO's high trailing PE ratio shows that the firm has been trading above its fair market value recently.
Summary
KO's valuation metrics are weak at its current price due to a overvalued PEG ratio due to strong growth. KO's PE and PEG are worse than the market average resulting in a below average valuation score.
Why did Coca Cola repurchase its shares?
Both Coca-Cola and PepsiCo have repurchased shares over the years in an attempt to stabilize EPS as top-line revenue growth has stalled. The only saving grace Coke has over PepsiCo is its dividend yield, which sits at 3.20 percent over the last twelve months, compared to PepsiCo's 2.63 percent.
How much has Coca Cola declined since 2012?
Declining Revenue. Coca-Cola revenues have declined since peaking in 2012 at roughly $48 billion, and is projected to fall to $31.29 billion by 2019 based on analyst estimates. That's the opposite direction that rival PepsiCo is projected to take over the next couple of years.
Is Coca Cola declining?
This has been the same case for Coca-Cola's revenue estimates, which have been declining for 2018 and 2019 at a much faster pace than that of PepsiCo. Both Coca-Cola and PepsiCo have repurchased shares over the years in an attempt to stabilize EPS as top-line revenue growth has stalled.
Is Coca Cola higher than Pepsi?
It is not only declining revenue that plagues Coke, but also a valuation that comes in higher than Pepsi's, at nearly 23 times 2018 earnings estimates, compared to PepsiCo's 21 times. Coca-Cola has also seen analysts lower trending EPS estimates, which in itself increases its valuation.