Coca-Cola (KO) PT Raised to $100 at Morgan Stanley, 'Top Pick'

Morgan Stanley analyst Dara Mohsenian raised the price target on Coca-Cola (NYSE: KO) to $100.00 (from $89.00) while maintaining a Overweight rating.

The analyst comments "Reiterate OW as Top Pick: KO's stock jumped 5.0% today (vs the S&P up +0.2%) on stronger than expected 2Q results driven by robust OSG. Even with a high bar, KO's Q2 results were impressive, with strong 5% unit case growth far above the 2.2% consensus, as well as Coke's 1.1% last nine quarter avg., and 7% OSG (using unit cases and 2% price/mix with 3% underlying price offset partially by -1% mix) above the 5.0% consensus. FY OSG of 5% moved to the high end of the prior 4-5% FY range but looks conservative, and comparable FY EPS moved up by ~100 bps. Q2 was boosted by an easy -1% unit case comparison, the World Cup, hot weather in Europe, and the America 250 celebration, but even after these factors, the level of Q2 unit case growth was still impressive, and Q2 tailwinds also drive strong visibility for Q3 given they continued in July. We also note Coke posted solid 3% unit case growth in Q1, which at the time was the strongest growth since the 3% result in Q1 of 2023. Bottom line, Coke's OSG remains in a different stratosphere than its megacap staples peers, and KO appears to be managing well the planned YTD shift in OSG balance more to volume from outsized price/mix in recent years. Net, the quarter instills further confidence in our view that Coke offers outsized OSG vs peers."

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