Did Coca-Cola's (KO) Costa Coffee Review Just Shift Its Beverage Growth Strategy?

• In August 2025, news emerged that The Coca-Cola Company is working with Lazard to review options for its Costa Coffee business, including a potential sale, as initial talks with private equity bidders progress and indicative offers are expected in early autumn.
• This development follows Coca-Cola's CEO expressing disappointment with Costa's performance relative to expectations and hints at broader changes in Coca-Cola's approach to the coffee segment.
• We'll explore how Coca-Cola's possible exit from Costa Coffee could influence its broader investment narrative and future growth prospects.

Trump's oil boom is here - pipelines are primed to profit. Discover the 22 US stocks riding the wave.

Coca-Cola Investment Narrative Recap

Being a Coca-Cola shareholder often means believing in the company's ability to adapt its global brand portfolio and pricing power to manage headwinds, like evolving consumer preferences and macroeconomic pressures. The recent Costa Coffee review signals a possible shift in focus but is unlikely to materially impact the company’s most immediate catalyst: sustained revenue growth through premiumization and innovation across core products. The biggest current risk remains the ongoing challenge of health-driven consumer shifts and potential sugar regulations, neither of which is directly altered by the Costa development.

Recent earnings showed that despite unit volume declines in important markets, Coca-Cola was able to grow revenue through premium pricing and continued demand for brands like Coke Zero Sugar and fairlife, an announcement that reinforces how the company's main catalyst lies in brand strength and execution, rather than in any individual product line. The Costa Coffee news links more directly to this strategy of sharpening focus on high-performing, high-growth categories, though investors should note it does not eliminate underlying volume risks.

Yet, set against those positive drivers, investors should not overlook the contrasting risk that persistent health trends and regulation could...

Read the full narrative on Coca-Cola (it's free!)

Coca-Cola's outlook anticipates $55.1 billion in revenue and $14.8 billion in earnings by 2028. This scenario implies a 5.4% annual revenue growth and a $2.6 billion earnings increase from the current level of $12.2 billion.

Uncover how Coca-Cola's forecasts yield a $78.70 fair value, a 14% upside to its current price.

Exploring Other Perspectives

With 25 fair value estimates from the Simply Wall St Community ranging from US$54.61 to US$95.13, market opinions on Coca-Cola’s potential vary greatly. As you weigh these perspectives, keep in mind that while many see opportunity linked to emerging market beverage growth, others caution about ongoing challenges from shifting consumer health preferences and sugar regulations.

Explore 25 other fair value estimates on Coca-Cola - why the stock might be worth 21% less than the current price!

Build Your Own Coca-Cola Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Coca-Cola research is our analysis highlighting 3 key rewards and 4 important warning signs that could impact your investment decision.
• Our free Coca-Cola research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Coca-Cola's overall financial health at a glance.

Contemplating Other Strategies?

Opportunities like this don't last. These are today's most promising picks. Check them out now:

• Rare earth metals are an input to most high-tech devices, military and defence systems and electric vehicles. The global race is on to secure supply of these critical minerals. Beat the pack to uncover the 28 best rare earth metal stocks of the very few that mine this essential strategic resource.
• AI is about to change healthcare. These 27 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early.
• This technology could replace computers: discover 23 stocks that are working to make quantum computing a reality.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com