Goldman Sachs Expects Coca-Cola (KO) Stock to Outperform Today After Strong Q3 Results

October 27, 2021 8:51 AM EDT
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Price: $53.84 -2.87%

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Shares of Coca-Cola (NYSE: KO) are up 2.8% in pre-open Wednesday after the company reported better-than-expected Q3 results.

Coca Cola reported Q3 EPS of $0.65 to top the analyst estimate of $0.58. Revenue for the quarter came in at $10 billion versus the consensus estimate of $9.78 billion.

“Our strategic transformation is enabling us to effectively navigate a dynamic environment and emerge stronger from the pandemic,” said James Quincey, Chairman and CEO of The Coca-Cola Company.

As a result, Coca-Cola raised its FY guidance to now expect organic revenue (non-GAAP) growth of 13% to 14%, EPS (non-GAAP) growth of 15% to 17%.

“We are updating our full-year guidance to reflect another quarter of momentum in the business. While the recovery continues to be asynchronous around the world, we are investing for growth to drive long-term value for the system. Our strong system alignment and networked organization are helping us unlock enormous potential in our brands and across our markets.”

Coca-Cola also said it remains “confident in the underlying momentum in the business,” as far as the FY2022 guidance is concerned.

Goldman Sachs analyst Bonnie Herzog reiterated a Neutral rating and a $55.00 per share price target on the KO stock, but said results were “much better-than-expected” as the company delivered “strong performance on both the top & bottom lines.

“KO's topline was up a strong +14% y/y driven by strong concentrate sales and price/mix. Margins were also better than expected - especially gross margins, ultimately driving a strong EPS beat of $0.65 vs. consensus of $0.58. Importantly KO took up FY21 guidance as well as provided a high level read on FY22. Given the better-than-expected Q3 results, we expect the stock to outperform today,” the analyst said in a client note.

Shares of KO closed at $54.47 today.

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