Coca-Cola's Growth Story Far From Over, Proprietary Model Suggests
Coca-Cola has been Warren Buffett's largest and longest-held equity position since 1988. Despite its recent price increase, investors may still have opportunities to profit from the beverage giant.
Shares of Coca-Cola (NYSE:KO) have risen 28.24% year-to-date and 35.86% over the past year. According to 24/7 Wall St.'s proprietary model, however, there is still room for growth. The model predicts a price target of $97.16 within the next 12 months, representing an upside of 10.1%.
The company's recent earnings report showed adjusted EPS of $0.97 on revenue of $13.38 billion, exceeding estimates and marking the fifth consecutive quarter with an earnings beat. Coca-Cola's global unit case volume rose 5%, aided by a FIFA World Cup activation in over 180 markets. Management has raised full-year comparable EPS growth guidance to 9-10% and free cash flow to around $12.4 billion.
The bull case for Coca-Cola relies on its strong brand strength, expanding margins, and the potential for fairlife capacity ramps at Webster. However, bears will point to concerns such as a BODYARMOR impairment and ongoing IRS tax litigation.