Coca-Cola Co. (NYSE: KO) is scheduled to release its first-quarter financial results before the markets open on Tuesday. Analysts are calling for $0.44 in earnings per share (EPS) and $8.29 billion in revenue. In the same period of last year, the beverage giant said had $0.48 in EPS and $8.02 billion in revenue.
The economy went from an 11-year raging bull market to a bear market and an instant recession in just 30 days or so. Now every business, even in the most “defensive” business sectors, are in trouble as earnings forecasts are nearly impossible to make and companies are uneven willing to stand behind any prior guidance. Companies like Coca-Cola and PepsiCo are supposed to be about as defensive as they come.
Argus recently upgraded Coca-Cola to Buy from Hold with a $54 target price. The firm recommends that investors dollar-average into existing long-term positions in the highest-quality stocks such as this one. In short, it’s not a pile all-in call. The same recommendation is there for initiating new positions at discounted prices, while still maintaining awareness that there are risks of future volatility in individual positions.
As Argus looks at history, “periods of severe stock-market turbulence have proven to be good times for investors with a longer-term time horizon to focus on the highest-quality and financially strongest names.” This is despite a March call in which the company warned that it does not expect to meet 2020 financial expectations due to the COVID-19 disruption. The Argus report from Chris Graja comes with the expectation that Coca-Cola’s earnings and the share price will rebound.
Excluding Monday’s move, Coca-Cola stock had underperformed the S&P 500 with a pullback of 13% year to date. In the past 52 weeks, the stock was up less than 2%.
Here’s what other analysts are saying about Coca-Cola ahead of the report:
- RBC has a Buy rating with a $58 price target.
- Goldman Sachs has a Neutral rating with a $46 price target.
- Morgan Stanley rates it as Equal Weight with a $46 price target.
- Barclays has a Buy rating.
- DZ Bank has a Buy rating with a $51 price target.
Coca-Cola stock traded down less than 1% to $47.71 on Monday, in a 52-week range of $36.27 to $60.13. The consensus price target is $53.05.
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