Coca-Cola shares gain the most in 16 weeks on Wednesday, second-quarter sales, earnings top estimates due to stronger demand for Diet Coke

July 26, 2018 10:55 am

Coca-Cola Company’s (KO) second-quarter revenue and earnings, reported on Wednesday, outstripped Wall Street estimates, supported by higher demand for the recently introduced new flavors of the company’s popular Diet Coke brand as well as its Zero Sugar brand.

Coca-Cola shares closed higher for a second consecutive trading session in New York on Wednesday. It has also been the sharpest daily surge since April 4th. The stock went up 1.83% ($0.83) to $46.09, after touching an intraday high at $46.58, or a price level not seen since February 5th ($46.92).

Shares of Coca-Cola have edged up 0.46% so far in 2018 compared with a 6.45% gain for the underlying index, S&P 500 (SPX).

In 2017, Coca-Cola’s stock surged 10.66%, thus, it again underperformed the S&P 500, which registered a 19.42% return.

Total revenue shrank 8% to $8.93 billion during the second quarter ended on June 29th. Analysts on average, however, had expected a larger drop, to $8.54 billion. Sales in Coca-Cola’s core beverage business surged 5% year-on-year during the second quarter, driven by stronger demand for Diet Coke, Coke Zero and sparkling water.

Coca-Cola’s sales in North America went up 7% year-on-year to $3.12 billion during the past quarter, but fell short of the median analyst estimate of $3.14 billion, mostly because of weaker demand for plant-based beverages and juices.

At the same time, the company’s sales in Europe increased 7% during the same period, following a reformulated recipe for a selection of sodas.

Meanwhile, net income attributable to shareholders was reported to have surged to $2.32 billion ($0.54 per share) during the quarter ended on June 29th, from $1.37 billion ($0.32 per share) in the year-ago period.

Coca-Cola’s earnings per share, excluding special items, were reported at $0.61 during the second quarter, or slightly above the median analyst forecast of $0.60 per share.

According to CNN Money, the 26 analysts, offering 12-month forecasts regarding Coca-Cola’s stock price, have a median target of $49.00, with a high estimate of $61.00 and a low estimate of $44.00. The median estimate represents a 6.31% upside compared to the closing price of $46.09 on July 25th.

The same media also reported that 14 out of 28 surveyed investment analysts had rated Coca-Cola’s stock as “Buy”, while 12 – as “Hold”.

Daily and Weekly Pivot Levels

With the help of the Camarilla calculation method, today’s levels of importance for the Coca-Cola stock are presented as follows:

R1 – $46.17
R2 – $46.24
R3 (Range Resistance – Sell) – $46.32
R4 (Long Breakout) – $46.55
R5 (Breakout Target 1) – $46.81
R6 (Breakout Target 2) – $46.93

S1 – $46.01
S2 – $45.94
S3 (Range Support – Buy) – $45.86
S4 (Short Breakout) – $45.63
S5 (Breakout Target 1) – $45.37
S6 (Breakout Target 2) – $45.25

By using the traditional method of calculation, the weekly levels of importance for Coca-Cola Company (KO) are presented as follows:

Central Pivot Point – $45.08
R1 – $45.63
R2 – $45.98
R3 – $46.53
R4 – $47.08

S1 – $44.73
S2 – $44.18
S3 – $43.83
S4 – $43.48

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