Coca-Cola Company: What to expect in 2024

The Coca-Cola Company (NYSE:KO) will look to turn around its soft share price performance in 2024. Investors have been cautious on the beverage giant due mainly to concerns around volume growth in developed markets, emerging market volatility, currency translation, and commodity cost volatility. Looking ahead, a key question will be if Coca-Cola (KO) stays on track to achieve its long-term organic sales growth target of +4% to +6%. Bulls expect 2024 to be a year of stronger innovation and partnership announcements for the Atlanta-based company, while bears are warning on macroeconomic pressures holding back a recovery.

2023 Stock Performance

Coca-Cola (KO) fell 8.5% this year through December 21 after reaching its high water mark in April. Sentiment has improved over the last 60 days, with shares up about 5%. The beverage stock trades above its 100-day moving average, but is still swapping hands below the 200-day moving average. Of the Dow Jones Industrial Average components, Coca-Cola’s (KO) share price return in 2023 ranked near the bottom at 25th out of the 30 Dow heavyweights.

What Quantitative Measures Say

Coca-Cola (KO) receives a Strong Buy rating from Seeking Alpha’s Quant Rating system. Strong factor grades for profitability, growth and earnings revisions boosted the quant score, which ranks 1st in the soda drink category and 5th overall out of 185 consumer staples stocks.

What Wall Street Says

Sell-side analysts are bullish on Coca-Cola (KO) into 2024. Of the 23 analysts with a rating on the books, 18 of them have a Buy-equivalent or higher rating, while just 5 have a Hold-equivalent rating and no analysts has a Sell-equivalent rating.

What Seeking Alpha analysts say

Three of the last four latest articles from Seeking Alpha analysts on Coca-Cola (KO) have been bullish, including Lightning Rock Research’s breakdown of how Coca-Cola’s (KO) robust digital marketing strategy and the company’s ongoing product and category innovations should continue to drive both topline and bottom-line growth.

Latest Earnings

In its most recent earnings report, Coca-Cola (KO) edged past consensus estimates on the strength of higher pricing across its portfolio. The beverage giant also raised its full-year organic sales guidance. Organic revenue was up 11% during the quarter vs. +7% consensus, led by gains in the Latin America (+20%), EMEA (21%), North America (+9%), Bottling Investments (+18%), and Global Ventures (+9%) segments. Volume was up 2% during the quarter, while price/mix accounted for nine percentage points of growth. Operating income grew 6% during the quarter, which included items impacting comparability and a 4-point currency headwind. Comparable currency neutral operating income grew 13%, driven by organic revenue growth across all operating segments, partially offset by an increase in marketing investments.

Earnings Predictions

Meanwhile, analysts expect the beverage giant to earn $0.48 per share in Q4 on revenue of roughly $10.59B. In the same period in 2022, Coca-Cola (KO) earned an adjusted $0.45 per share on $10.20B in revenue.

Peers

Coca-Cola (KO) still had a market cap edge on rival PepsiCo (PEP), although the gap narrowed in 2023. The big three of Coca-Cola (KO), PepsiCo (PEP), and Keurig Dr Pepper (KDP) collectively have lost global beverage market share to the rest of the pack. However, Coca-Cola (KO) is forecast to see stronger revenue and EPS growth in 2024 than the sector as a whole.