Here's How Much Traders Expect Coca-Cola Stock Could Move After Earnings Tuesday

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.

Investopedia Answers

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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.

Related Education

The Evolution of the Coca-Cola Brand

Coca-Cola vs. Pepsi: Key Differences in Business Models

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.

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