Coca-Cola shares gain the most since February 2015 on Tuesday, quarterly results top estimates driven by sales of sugar-free sodas, premium waters

October 31, 2018 8:57 am

Coca-Cola Company’s (KO) quarterly earnings and revenue, reported on Tuesday, exceeded Wall Street estimates, supported by stronger demand for its sugar-free sodas and premium waters.

Coca-Cola shares closed higher for a second consecutive trading session in New York on Tuesday. It has also been the sharpest daily surge since February 10th 2015. The stock went up 2.52% ($1.17) to $47.63, after touching an intraday high at $47.74, or a price level not seen since January 31st ($47.90).

Shares of Coca-Cola have surged 3.81% so far in 2018 compared with a 0.34% gain for the benchmark index, S&P 500 (SPX).

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

Coca-Cola’s total revenue shrank 9% year-on-year to $8.25 billion during the quarter ended on September 28th, as the company disposed of its low-margin bottling operations. In comparison, analysts on average had expected revenue of $8.17 billion.

Coca-Cola’s sales from its core beverage business (organic revenue) went up 6% during the third quarter from a year earlier.

Sales of sparkling soft drinks rose 2% year-on-year during the past quarter, supported by sales of the company’s trademark Coca-Cola as well as diet variations of Sprite and Fanta.

At the same time, sales of premium waters and sports drinks surged 5% year-on-year, mostly driven by strong demand in Mexico and China.

Meanwhile, net income attributable to shareholders went up to $1.88 billion ($0.44 per share) during the quarter ended on September 28th from $1.45 billion ($0.33 per share) in the year-ago period.

Coca-Cola’s earnings per share, excluding special items, were reported at $0.58 per share during the third quarter, which outstripped the median analyst estimate pointing to adjusted earnings of $0.55 per share.

“We are impressed with Coca-Cola’s ability to deliver a strong and balanced topline, suggesting that its refranchising and portfolio transformation are paying off,” Wells Fargo analyst Bonnie Herzog wrote in a note, cited by Reuters.

According to CNN Money, the 26 analysts, offering 12-month forecasts regarding Coca-Cola’s stock price, have a median target of $50.00, with a high estimate of $61.00 and a low estimate of $45.00. The median estimate represents a 4.98% upside compared to the closing price of $47.63 on October 30th.

The same media also reported that 13 out of 28 surveyed investment analysts had rated Coca-Cola’s stock as “Hold”, while 12 – as “Buy”.

Weekly Pivot Levels

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

Central Pivot Point – $46.25
R1 – $47.06
R2 – $48.21
R3 – $49.02
R4 – $49.84

S1 – $45.10
S2 – $44.29
S3 – $43.14
S4 – $42.00

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