News

The Coca-Cola Company KO is slated to report first-quarter 2024 earnings on Apr 30. The Atlanta, GA-based company has been reporting steady earnings outcomes, as evident from its positive top and bottom-line surprise trends in the trailing four quarters. KO has a trailing four-quarter earnings surprise of 5.6%, on average. Additionally, the company’s top line surpassed the Zacks Consensus Estimate in the trailing 12 quarters. Given its positive record, the question is, can KO maintain the momentum?

Coca-Cola’s strong brand equity, marketing, research and innovation have helped it garner a market share of more than 40% in the non-alcoholic beverage industry. KO has been putting its best foot forward to evolve its business model to become a total beverage company with something for everyone to drink.

The stock has been steadily rising this year, notching up a decent gain after a decline of 7.6% recorded in 2023. The company has been benefiting from strong revenue growth across most of its operating segments, aided by improved price/mix and increased concentrate sales. That said, let us see if it is time to buy the Coca-Cola stock, which has now climbed around 4.8% year to date to easily top the industry’s rise of 2.6%.

Image Source: Zacks Investment Research

While the stock price has been increasing since the start of 2024, investors continue to be unsure whether it is wise to buy KO just ahead of its earnings release.

Inflationary cost pressures related to higher commodity and material costs, as well as higher marketing investments, have been concerning for KO. The persistence of these trends may affect the company’s margins and profitability in the near term.

Why Coca-Cola Stock is a Long-Term Buy No Matter What Q1 Earnings Hold

No matter where the Coca-Cola stock heads post the first-quarter 2024 earnings results, the company remains a long-term buy option for varied reasons. But yes, looking for the right entry point is crucial.

Coca-Cola stands to benefit from its huge market share in the beverage space. The company looks well-poised for growth, backed by its innovation efforts and accelerated digital investments. It is on track with its strategy of becoming a total beverage company through the streamlining of its portfolio, focusing on the core brands and investing in its portfolio of brands to meet the evolving needs of consumers.

The company has meticulously expanded its offerings in sync with the evolving consumer preferences for healthier alternatives and energy drinks over sugary sodas and drinks. Coca-Cola has diversified from its soda offerings to include brands like vitaminwater, smartwater, Simply juices and Dasani in its portfolio.

Further, the company’s digital initiatives place it well amid the recent splurge in e-commerce demand. It has been accelerating investments to build strong digital capabilities. Coca-Cola is evolving into an organization that efficiently executes marketing, commercial, sales and distribution, both offline and online.

KO is strengthening consumer connections and further piloting numerous digital-enabled initiatives through fulfillment methods, be it B2B to home or B2C platforms in many countries, to capture online demand for at-home consumption. It is also progressing well with the rollout of multi-category eB2B platforms with its bottlers globally. The company’s focus on accelerating expansion in digital channels is likely to be sustainable, positioning it for long-term growth.

Q1 Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Coca-Cola this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that is not the case here. KO has an Earnings ESP of -0.70%. The company currently carries a Zacks Rank #3.

You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

CocaCola Company (The) Price and EPS Surprise

Coca-Cola is expected to register bottom-line growth when it reports first-quarter 2024 results. The consensus estimate for first-quarter earnings is pegged at 69 cents per share, suggesting a rise of 1.5% from the prior-year quarter’s reported figure. The consensus mark for revenues is pegged at $10.95 billion, indicating a decline of 0.3% from the prior-year quarter’s reported figure.

Conclusion

KO has certainly proved its might in the past several years, retaining its top position in the industry. With its long-standing history of positive earnings trends, investors eagerly await the earnings release of this beverage behemoth. Whatever the earnings outcome, the Coca-Cola stock undoubtedly deserves a place in your portfolio.

Consumer Stocks in Focus This Earnings Season

Here are some Consumer Staples companies that you may want to consider on the basis of our model:

Molson Coors TAP currently has an Earnings ESP of +3.30% and a Zacks Rank #3. The company’s top and bottom lines are expected to have gained year over year in first-quarter 2024. The Zacks Consensus Estimate for TAP’s quarterly revenues is pegged at $2.5 billion, suggesting a rise of 6.5% from the prior-year quarter’s actual.

You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Molson Coors’ first-quarter EPS is pegged at 71 cents, indicating 31.5% growth from the year-ago period’s reported figure. TAP has a trailing four-quarter earnings surprise of 37.2%, on average.

Church & Dwight Co. CHD currently has an Earnings ESP of +1.00% and a Zacks Rank #3. The company’s top and bottom lines are expected to register year-over-year increases when it reports first-quarter 2024 numbers. The Zacks Consensus Estimate for CHD’s quarterly revenues is pegged at $1.5 billion, suggesting year-over-year growth of 4.3%.

The Zacks Consensus Estimate for Church & Dwight’s quarterly EPS is pegged at 86 cents, indicating year-over-year growth of 1.2%. CHD has a trailing four-quarter earnings surprise of 9.7%, on average.

Hershey HSY currently has an Earnings ESP of +1.42% and a Zacks Rank #3. HSY is likely to register top-line growth when it reports first-quarter 2024 numbers. The Zacks Consensus Estimate for its quarterly revenues is pegged at $3.1 billion, implying growth of 4.5% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for Hershey’s quarterly earnings is pegged at $2.72 per share, suggesting a decline of 8.1% from the year-ago quarter’s reported number. HSY delivered an earnings surprise of 6.5%, on average, in the trailing four quarters.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Only $1 to See All Zacks' Buys and Sells

We're not kidding.

Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.

Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 228 positions with double- and triple-digit gains in 2023 alone.

See Stocks Now >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.