Coca-Cola Stock: Do Analysts Foresee Growth Potential?
A majority (52%) of the 27 analysts covering Coca-Cola (KO) stock have given it a “buy” rating as of February 12, 2018. About 44% of them have given the stock a “hold” recommendation, and 4% have given it a “sell.”
On January 12, 2018, Evercore ISI Group upgraded Coca-Cola stock from “in line” to “outperform.” On December 14, 2017, Deutsche Bank initiated coverage on Coca-Cola stock with a “buy” rating.
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Coca-Cola’s growth prospects
Coca-Cola is a leading nonalcoholic beverage company with a vast presence in more than 200 countries. It has an impressive product portfolio comprised of more than 500 carbonated and noncarbonated brands and about 3,900 beverage choices. Its brand portfolio includes 21 billion-dollar brands, including Diet Coke, Fanta, Minute Maid, and Dasani.
To address the weak volumes in the sparkling or carbonated beverage category, Coca-Cola is expanding its low or no-calorie offerings. It’s also enhancing its portfolio of still beverages, which includes ready-to-drink teas, bottled water, and juices. The company has made several strategic acquisitions, including Suja Juice, to capture the growth opportunities for healthier beverages.
To enhance its profitability, Coca-Cola has been refranchising its distribution network. On October 30, 2017, it announced the completion of the refranchising of its bottling operations in the United States.
12-month price target
On January 4, 2018, Wells Fargo raised its price target for Coca-Cola stock to $52 from $51. On January 8, Cowen and Company increased its price target to $44 from $42. As of February 12, the 12-month price target for Coca-Cola stock was $49.87. That reflects an upside potential of 13.4% compared to the closing stock price of $43.97 on February 12.
Coca-Cola’s upcoming results on February 16 are likely to cause further revisions to analysts’ price targets for the company.