:max_bytes(150000):strip_icc()/GettyImages-2246706941-d7349eed8e9248b39c7be13554a31f57.jpg "Here’s How Much Traders Expect Coca-Cola Stock Could Move After Earnings Tuesday")
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Key Takeaways
- Coca-Cola is slated to report quarterly earnings on Tuesday morning, following a record run for the soda maker’s stock in recent weeks.
- Options pricing suggests traders expect the stock could reach new highs following the report.
The Coca-Cola Company is set to post its fourth-quarter earnings ahead of the market open Tuesday, with traders anticipating the beverage giant’s stock could extend its record-setting rally following the results.
Current options pricing suggests traders see Coca-Cola (KO) stock moving up to 3% in either direction by the end of the week following the report. A move of that size from Friday’s record-high close at $79 could lift the stock above $81, or bring it back down to about $76.
The shares have gained 13% since the start of the year, amid a broader rotation into consumer staples stocks. Rival PepsiCo (PEP), which on Tuesday reported better-than-expected earnings, has also seen its stock surge in recent weeks.
Why This Matters to Investors
Widely regarded as a bellwether for the consumer staples sector, analysts and investors will likely be watching what Coca-Cola’s results could say about the state of U.S. consumers, and how America’s food and beverage giants are navigating shifting tastes.
Since last reporting results in October, Coca-Cola has announced plans to transition to a new CEO, with company veteran COO Henrique Braun set to succeed James Quincey’s nine-year tenure starting on March 31. The company’s revenue is expected to come in at roughly $12 billion for the fourth quarter, up 4% year-over-year, while adjusted earnings per share are projected to rise by 2 cents to $0.57, according to estimates compiled by Visible Alpha.
Ahead of the report, UBS analysts said they expect a solid quarter from Coca-Cola and that the biggest hurdle to the stock rising could be a high valuation compared to its peers. The analysts said it’s possible investors may look to other consumer staples stocks for higher growth potential.
Of the seven analysts with current ratings tracked by Visible Alpha, six have recommended buying Coca-Cola’s stock, compared to one neutral rating. Their average price target is just above $81, suggesting slim upside to Friday’s record close.
