Stock price when the opinion was issued
Brand strength, pricing power, geographic diversification. Big potential expansion in coffee. Really gets local culture. Chart shows a bit of resistance at this level, and we want to see it get through that. Whole chart is decent. Down less than the market these last few days. Beverage sector is pretty defensive and predictable. Metrics look pretty good. Yield is 2.82%.
(Analysts’ price target is $75.38)
KO is now trading at 19.4x times' Forward P/E. KO is a mature consumer staples company and KO used to be a “bond proxy” for income investors due to the stability of its business, the capital-light nature of beverages and its high dividend yield. KO’s share price was quite resilient last year. However, due to the new expectation that rates may stay higher for longer, most consumer staples names have experienced pressure in recently, as bonds become a safer alternative for yield. KO is largely mature, revenue growth going forward is expected to be around 5%. Having said that, valuation is at a more attractive level now, currently trading at 19.4x Forward P/E, while historical averages in the last few years range from 19.3x to 26.1x. It is not a huge buy yet, but we would be OK to slowly start buying, for those with a decent time frame.
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