Coca-Cola's Q3 Performance Highlight Resilience Amid Economic Challenges and Strong North American Sales Growth: Analysts - Coca-Cola (NYSE:KO)

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Coca-Cola Company KO shares are trading lower on Thursday.

Yesterday, the company reported a third-quarter 2024 sales decline of 1% year-on-year to $11.9 billion, beating the analyst consensus estimate of $11.59 billion.

Revenue performance included a 10% growth in price/mix and a 2% decline in concentrate sales. Concentrate sales were 1 point behind unit case volume, primarily due to the timing of concentrate shipments.

Analysts covering Coca-Cola Company provided their takes:

BofA Securities analyst Bryan D. Spillane reiterated the Buy rating on the stock, with a price forecast of $77.

Morgan Stanley analyst Dara Mohsenian maintained Coca-Cola with an Overweight rating, lowering the price objective from $78 to $76.

Truist Securities analyst Bill Chappell reiterated the Buy rating with an unchanged price forecast of $80.

Also Read: Coca-Cola Q3 Earnings: EPS Beat, Pricing Growth Offset By Volume Decline, Sees 10% Q4 Organic Revenue Growth

BofA Securities: According to the analyst, weaker economic conditions in emerging markets like China and the Middle East worsened weather-related challenges in India and Western Europe.

However, North America saw a boost of about 500 basis points in organic sales due to a favorable product mix, particularly from Topo Chico and sparkling drinks.

Fairlife also showed strong double-digit growth, increasing protein shake consumption across various demographics, the analyst adds.

Overall, the North American mix added 200 basis points to total sales, indicating a solid base as the analyst rides out normalization in other regions.

Spillane increased FY24 EPS estimate to $2.85 from $2.83. However, the analyst lowered the FY25 estimate to $2.98 from $3.05.

Morgan Stanley: The analyst is particularly bullish about the company’s forward commentary on returning to volume growth.

Overall, the analyst remains bullish about the company’s performance, noting that its organic sales growth is consistently strong compared to competitors. This growth is supported by several factors, including solid historical volume increases, even though there was a negative note in the third quarter.

Importantly, this growth is achieved without relying on the unrealistic rebounds that many peers are expected to experience in the future, Mohsenian adds.

The analyst notes that the company appeared unconcerned about the external environment, stating that the macro conditions show some resilience.

After the third quarter results, the analyst’s estimates for 2024 remain largely the same, but Mohsenian reduced the 2025 EPS by 3% due to foreign exchange pressures.

Consequently, the price target has been adjusted down, based on a 25.5x multiple of the revised 2025 EPS.

Truist Securities: Chappell has revised the estimates for FY24 to $46.01 billion in sales (with an unchanged EPS estimate of $2.84). For FY25, the sales estimate is lowered to $47.62 billion, and the EPS estimate is adjusted to $2.93, the analyst writes.

Additionally, new estimates for FY26 are introduced at $50.00 billion in sales and $3.18 in EPS.

Price Action: KO shares are trading lower by 1.31% to $67.31 at last check Thursday.

Photo via Shutterstock

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Coca-Cola’s Q3 Performance Highlight Resilience Amid Economic Challenges and Strong North American Sales Growth: Analysts – Coca-Cola (NYSE:KO)

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