Coca-Cola will report earnings Tuesday before market hours, and the report will show whether the drinks giant can meet Wall Street’s revenue expectations after a softer prior quarter. Last quarter, the company posted $11.82 billion in revenue, up 3.6% from a year earlier, but still missed analysts’ revenue and EBITDA estimates.
This time, the market is looking for revenue growth of 8.5% from a year ago, when sales were flat. That sets up a sharper test for a company that rarely misses Wall Street’s revenue estimates, especially after the majority of analysts covering Coca-Cola reconfirmed their estimates over the last 30 days.
The comparison with peers is not flattering for Coca-Cola. Keurig Dr Pepper reported revenue growth of 9.4% and topped expectations by 3.7%, while Constellation Brands posted an 11.3% drop in revenue yet still beat estimates by 2.3%. Shares in the beverages, alcohol and tobacco segment rose 4.3% on average over the last month, helped by gains of 9.3% for Keurig Dr Pepper and 8.5% for Constellation Brands, while Coca-Cola’s stock was unchanged.
That leaves Coca-Cola heading into the report with an average analyst price target of $83.67, above its current share price of $76.64. The gap suggests investors still see room for the stock to move, but only if Tuesday’s numbers show the company can get back to the steady execution that usually keeps it in line with expectations. Ko stock is about to be judged on whether last quarter was a wobble or the start of something more stubborn.
