The Coca-Cola Company (KO) Investors Are Running For The Door

The Coca-Cola Company (NYSE:KO) has been downgraded by HSBC Securities on March 12 which now rates the stock as Hold compared with Buy rating suggested in the past. Analysts at Citigroup, shed their positive views on February 15 by lowering it fromBuy to Neutral. Analysts at UBS, made their first call about the stock on December 13, recommending it is Neutral. Goldman analysts came out with bullish views on April 17 when the call was made. They think the stock is now Neutral compared to to their prior call for Sell.

KO stock dropped -1.13% in recent trade and currently has a stock-market value of $197.3B. The shares finished at $45.7, after trading as low as $45.63 earlier in the session. It hit an intraday high Thursday at $46.11. Trading activity significantly weakened as the volume at ready counter decreased to 18,466,620 shares versus 22,172,760 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 16,854,934 shares. The stock is now 10.25% above against its bear-market low of $41.45 on May 15, 2018. It has retreated -11.25% since it’s 52-week high of $50.84 reached in November. Now the market price is up 2.54% on the year and down -3.48% YTD.

Wall Street’s most bullish The Coca-Cola Company (NYSE:KO) analysts are predicting the share price to blow past $56 per share during the next 12 months. The current median share price forecast by them is $50, suggesting that the stock could increase 9.41% in that time frame. The average price target of $50.14 calls for a nearly 9.72% increase in the stock price.

The Coca-Cola Company (KO)’s 50 day simple moving average (SMA 50) price is $46.94 and its 200-day simple moving average (SMA 200) price is $46.42. The company’s stock currently has a total float of 4.24B shares. Its weekly volatility is hovering around 1.34% and felt 1.37% volatility in price over a month. On the upside, the share price will test short term resistance at around $46. On a downside, the stock is likely to find some support, which begins at $45.52. The failure to get near-term support could push it to $45.33.

When looking at valuations, The Coca-Cola Company (KO) has a cheap P/E of 29.33x as compared to industry average of 50.96x. Moreover, it trades for 20.19 times the next 12 months of expected earnings. Also, it is trading at rather expensive levels at just over 11.48x price/book and 6.19x price/sales. Compared to others, The Coca-Cola Company is in a different league with regards to profitability, having net margins of 20.1%. To put some perspective around this, the industry’s average net margin is 3.92%. KO’s ROE is 34.9%, which is also considerably better than the industry’s ROE of 8.49%. It’s also very liquid in the near term, with a current ratio of 1. The stock has a debt/capital of 2.56.

Shares of KO have dropped -7.2% since the company’s most recent earnings report. Over the past 12 fiscal quarters, The Coca-Cola Company (NYSE:KO) has topped consensus earnings estimates in 10 quarters (83%), missed earnings in 1 quarters (8%), whereas at 1 occasion EPS met analyst expectations. KO last reported earnings that receded expectations. The company raked in $0.43 per share, 2.38% change on the same period last year. That was worse than consensus for $0.43. Revenue for the recent quarter stood at $7.06 billion, down -6% on last year and above the $7.03 billion predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $7.63 billion to $8.21 billion, which should be compared with $7.46 billion generated last year. EPS is seen in a range of $0.45 to $0.47, against the $0.49 reported a year ago.