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I think it is a great stock with an invaluable brand, but I am skeptical that it will do well in the next few years. Coke is fighting all the weight loss peptides developed by Lilly and Novo Nordisk. I see a significant portion of consumers drinking 3 cokes or more a day cutting soda out of their life, even diet soda. If Coke finds a way to make healthy products and does a good job marketing healthy products to consumers that outlook will change. Maybe Coke should look to get into the market of longevity tonics and low calorie high protein drinks and snacks.
I wouldn't count KO out, there are lot of poor 3rd world nations with a growing middle class that can afford to drink sodas from an American iconic brand. That is invaluable and difficult to quantify.
Current PEG for KO is 17, and the PE ratio is high at 28. I think a better PE ratio for KO is 21-24.
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The user Simply Wall St User holds no position in NYSE:KO. Simply Wall St has no position in any of the companies mentioned. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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KO is still a good base investment
My main narrative for KO: Strong brands Well established distribution network (starting from the source (water) over botteling and delivery to selling points) with an "all world" footprint To grow revenue KO now sells also Coffee (Costa) and other beverages over the existing network. The idea is to have the beverage for every daytime, so the offering and with that revenue will still increase To optimize finance (less investments) botteling in several countries is outsourced as a franchise Strong growth in Latin Amerika But: I miss innovations or trend setting Basically they purchase niche players or lower Top5 brands and scale them through their distribution network Or cooperate, in case of Monster beverage I focus also on: ...
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3.0% overvalued intrinsic discount5.28%
Revenue growth p.a.
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Coca-Cola Can Draw Minor Benefits from Prolonged Economic Uncertainty
Key Takeaways KO can remain a reliable performer in a mature but growing category. Its diversified portfolio of beverages means it can handle shifting beverage preferences Its reduction of debt will help it endure any market volatility, like it has in the past Dividend payout ratio is rising and management will eventually have to address it.
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7 months ago author updated this narrative
