UPDATE: BMO Capital Upgrades Coca-Cola (KO) to Outperform

(Updated - June 1, 2015 10:27 AM EDT)

BMO Capital upgraded Coca-Cola (NYSE: KO) from Market Perform to Outperform with a price target of $48.00 (from $44.00). Analyst Amit Sharma is confident Coca Cola's ability to return to or exceed long-term growth targets, and he sees an attractive entry given reasonable expectations and "undemanding valuation."

"Following three years of lackluster sales and earnings growth, which caused KO shares to underperform PEP and the S&P 500 by 40 percentage points, KO’s operating performance is poised to improve in 2016, positioning the company to exceed current consensus estimates and regain its valuation premium," said Sharma.

The analyst added, "We expect KO’s sales and EPS growth to approach long term targets in 2016, driven by a combination of internal (e.g., stronger price/mix, higher media spending, greater focus on cost cutting, and a better-aligned incentive compensation structure) and external (e.g., macroeconomic environment, rational competition) drivers. Notably, contrary to widespread perception, the carbonated soft drinks (CSD) category is not in a structural decline as both volumes and dollars are still rising, led by mid-single-digit growth in emerging and developing markets."

For an analyst ratings summary and ratings history on Coca-Cola click here. For more ratings news on Coca-Cola click here.

Shares of Coca-Cola closed at $40.96 yesterday.

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