Coca-ColaThe Coca-Cola Company · KO
The $96.91 close is 0.5% below the 52-week high of $97.39, and the debate ended Bull 4 to Bear 3, a HOLD
Q3 comparable EPS up 11% and a raised outlook confirmed earnings growth, but a 27.7x forward P/E and 5.6% EPS growth expected next year limit the upside. On Oct 27 Q3 revenue of $13.4B (+7%) and volume up 5% lifted the full-year comparable EPS growth outlook to at least 11%, and the Indian bottling parent filed draft IPO papers on Nov 6–7 (per reports)
Research team debate
Of six issues, the raised outlook, the Africa bottler sale and volume growth went to Bull, while valuation, the IRS case and target upside went to Bear. Bull 4 to Bear 3 is a one-vote gap, so the call is HOLD.
The call is HOLD. The raised outlook and 5% volume growth confirmed earnings growth, but a 27.7x forward P/E, a PEG of 4.9 and just 1.6% average target upside kept the gap to one vote. The call reopens if the 2027 outlook at Q4 results is at or above the 5.6% FY27 EPS growth consensus.
- Bull case — the full-year comparable EPS growth outlook rose to at least 11%, Q3 volume of +5% (Zero Sugar +16%) came from volume rather than price, and the bottler sale costs only 2% of EPS.
- Bear case — the 27.7x forward P/E is 1.4 times the 20.0x peer median, the PEG is 4.9, average target upside is only 1.6%, and an IRS appeal loss could mean up to $14B in extra payments.
- On hold — no issue was held; the call reopens depending on whether the 2027 outlook at Q4 results (date TBD) meets the 5.6% FY27 EPS growth consensus.
1aDebate by Issue · 6
Earnings growth is confirmed. On Oct 27 the company raised its full-year comparable EPS growth outlook from 9–10% to at least 11% and organic revenue growth from about 5% to at least 5%. Q3 comparable EPS was $0.91 (+11%), the operating margin was 33.4%, and free cash flow is guided to at least $13.0B.
This year's figure was helped by currency. About 3pp of this year's comparable EPS growth is currency, and FY27 EPS is expected at $3.53, up only 5.6%. Q4 has six fewer days and the outlook includes inventory reductions, so the Q3 pace will not carry over.
Even excluding currency, the outlook lifted currency-neutral EPS growth from 7–8% to at least 9%. The 5.6% for next year already includes about −2% from the bottler sale, which on a simple add-back puts the underlying business near 8%.
Judged for the Bull side. Even after removing about 3pp of currency from the at-least-11% outlook, growth is about 8% or more, and next year's 5.6% already absorbs about 2pp from the sale, so the Bull view that earnings growth continues carries more weight. Currency turning into a slight headwind next year remains, as the Bear notes.[S3·S1]
Its earnings power stands out even among defensives. Coca-Cola's TTM operating margin is 32.1% and free cash flow margin is 28.0%, while fellow beverage name Monster trades at 35.7x forward and Procter & Gamble at 23.7x. With comparable EPS growth of at least 11% this year, a premium is explainable.
The multiple is running ahead of growth. The 27.7x forward P/E is 1.4 times the 20.0x peer median, and the P/S of 8.1x is 3.7 times the 2.2x median. A PEG of 4.9 on 5.6% FY27 EPS growth is expensive for growth that halves from about 10% this year.
Judged for the Bear side. On a growth-adjusted basis a PEG of 4.9 is high for a stretch where earnings growth halves, and the Bear's 1.4 times the peer median is the more direct measure. The Bull's margin advantage is real but already priced in.[S1·S2·S7]
Revenue shrinks far more than earnings. The company puts the 2027 sale effect at about an 8% drop in comparable revenue but only about 2% in comparable EPS. Bottling earns little profit per dollar of revenue, so the company just gets lighter, and a Q4 close removes uncertainty quickly.
A slowdown is flagged. Per the company's Oct 27 release (S3), Q4 loses about 4% of revenue and 3% of EPS to the sale, and 2027 loses another 2% of EPS. The close is a company assumption subject to regulatory approval, and the shrinkage is large against organic revenue growth of about 5%.
Judged for the Bull side. The earnings effect is about a quarter of the revenue effect (about 2% of EPS vs 8% of revenue), so the Bull's point that the damage is limited holds. A delay in regulatory approval could still disturb the outlook.[S3]
The hit is manageable. Per Bloomberg Law (S8), it has already paid $6B, and a loss would add about $14B, 3.4% of the $414.79B market cap. Bloomberg Law's June reporting (S8) said the panel at the June oral argument was sympathetic, and the 3M ruling from the Eighth Circuit was cited in the company's favor.
There is no ruling date and it is excluded from guidance. The company's 19.7% tax-rate outlook excludes this case, and the extra $14B is about as large as this year's free cash flow of at least $13.0B and roughly 84% of the $16.60B in cash and short-term investments. No outcome since June has been confirmed.
Judged for the Bear side. The Bear's point that up to $14B, excluded from guidance, matches a full year of free cash flow with the ruling date open is the stronger one. The Bull's sizing at 3.4% of market cap eases the burden but does not remove it. Case figures come from external reports (Bloomberg Law); the company filings were not read.[S3·S8]
Targets rose across the board after the results. All five raised, and on Oct 28 UBS went to $106, TD Cowen to $104, Citi to $103, JPMorgan to $98 and Freedom to $89, with no cuts. Twenty of 24 ratings are Buy.
Even after the raises the targets are almost at the price. The $98.43 average is only 1.6% above the $96.91 close and JPMorgan's $98 is +1.1%. Freedom Broker's $89 is 8.2% below the close, and the price sits within 0.5% of the 52-week high of $97.39.
Judged for the Bear side. The direction of targets is up, but the 1.6% gap between the $98.43 average and the close is the Bear's more direct measure that further upside has little support. The raises are already in the price.[S4]
Volume is driving growth. Q3 volume rose 5%, led by India, China, Mexico and Brazil, with Zero Sugar +16%, water +8%, Asia Pacific +6% and Latin America +6%. The company says it gained value share in total non-alcoholic ready-to-drink beverages.
North America is stalled. Its volume was flat, sports drinks fell 3%, and price/mix added just 1%. Concentrate sales (+7%) ran 2pp ahead of volume (+5%) because of shipment timing, which could reverse in Q4.
Judged for the Bull side. Total volume of +5% together with confirmed value-share gains supports the Bull view that emerging markets are filling the North American gap. The risk that the shipment-timing benefit reverses in Q4 remains, as the Bear points out.[S3]
1bScenarios
LightView does not issue its own target price. The high, average and low of external target prices are used as price references for scenarios[S4]
High target $106 · assumes the raised outlook holds and 2027 EPS growth tops 5.6%
Average target $98.43 · assumes volume growth near 5% and EPS growth of 5–6%
Low target $80 · assumes slower growth and a lower multiple
1cConditions That Change the Verdict
The verdict is based only on the data in this report and is not a recommendation to buy or sell.
Investment Summary
Q3 2026 revenue of $13.38B (quarter ended Oct 2) rose 7.4% and operating income of $4.47B rose 11.3%. The $96.91 close is 0.5% below the 52-week high and the forward P/E is 27.7x.
High$97.39
2aKey Data
The raised outlook and 5% volume growth support earnings, but a 27.7x forward P/E and just 1.6% average target upside cap the move
2bKey Metrics
Financials are for Q3 2026 (ended Oct 2; Yahoo shows 9/30). Yahoo lists the same $13.38B revenue for Q2 and Q3 2026; the raw collector data shows the same values and both match the company's reported $13.4B for each quarter, so they are used as is. Margins here use Yahoo data, so the prior-year Q3 margin is 32.2% on Yahoo's calculation versus the 32.0% the company reported. Total debt may include lease liabilities
Business & Competitive Advantage
The company sells beverage concentrate to bottling partners. Q3 volume rose 5%, led by Coca-Cola Zero Sugar at +16% and water at +8%.
3aBusiness Structure
Q3 Trademark Coca-Cola volume +5% · Zero Sugar +16% · Diet Coke +6%
Q3 volume EMEA +5% · Latin America +6% · North America flat · Asia Pacific +6%
Q3 volume +8% · the Africa bottling sale is assumed to close in Q4, subject to regulatory approval
Water +8% · sports drinks −3% · juice, dairy and plant-based (including fairlife) flat
- Raised outlook · On Oct 27 raised the full-year outlook to organic revenue growth of at least 5% and comparable EPS growth of at least 11% · the 2027 outlook comes with Q4 results
- Bottling clean-up · Africa bottling sale assumed to close in Q4 · about an 8% headwind to 2027 comparable revenue and 2% to EPS (company outlook)
- India listing · Per reports, on Nov 6–7 the parent of Indian bottler HCCB filed draft IPO papers with SEBI · an offer for sale cutting the stake from about 60% to 45% (reports)
- Outlook · Broadening volume growth across India, China and Latin America, with the 2027 outlook due at Q4 results
3bCompetitive Advantage (Moat) Assessment
Six sources rated Strong·Medium·Weak
The company says it gained value share in total non-alcoholic ready-to-drink beverages in Q3
Operating margin of 32.1% over the last four quarters and 33.4% in Q3
Free cash flow of at least $13.0B expected this year · total debt −12.2% in a year
Volume is up 5%, but FY27 EPS growth is expected to slow to 5.6%
North America flat and sports drinks −3%; PepsiCo trades at 16.7x forward earnings
A forward P/E of 27.7x is 1.4 times the 20.0x peer median
The brand and cash generation are strong, but the high multiple already prices in much of that strength
Earnings & Financials
TTM revenue is $51.05B, operating income $16.39B (a 32.1% margin) and free cash flow $14.28B, while total debt fell 12.2% in a year.
4aRevenue & Earnings
| Q3 2025 | Q4 | Q1 2026 | Q2 | Q3 | |
|---|---|---|---|---|---|
| Revenue | 12.5 | 11.8 | 12.5 | 13.4 | 13.4 |
| Operating Income | 4 | 2.9 | 4.4 | 4.7 | 4.5 |
| Net Income | 3.7 | 2.3 | 3.9 | 4.4 | 4 |
| Operating Margin | 32.2% | 24.2% | 35.1% | 35.1% | 33.4% |
Operating margin moved 32.2% → 24.2% → 35.1% → 35.1% → 33.4%, and TTM revenue is $51.05B with operating income of $16.39B. The company reports Q3 comparable EPS of $0.91 (+11%) (Yahoo Finance, Oct 27 company release)
4bCash Flow
| Annual (FY ends Dec) | 2023 | 2024 | 2025 | TTM |
|---|---|---|---|---|
| Operating Cash Flow | 11.6 | 6.8 | 7.4 | 16.2 |
| Capex | 1.9 | 2.1 | 2.1 | 1.9 |
| Free Cash Flow | +9.7 | +4.7 | +5.3 | +14.3 |
4cFinancial Structure
| Item | Now | End of Sep 2025 | Change |
|---|---|---|---|
| Cash and short-term investments (9/30) | $16.60B | $15.78B | +5.2% |
| Total debt (9/30) | $41.62B | $47.42B | −12.2% |
| Equity (9/30) | $37.37B | $31.25B | +19.6% |
| Shares outstanding (9/30) | 4.30B shares | 4.30B shares | 0.0% |
4dProfitability Metrics
| Metric | Q3 | Year ago | Calculation |
|---|---|---|---|
| Operating margin | 33.4% | 32.2% | Operating income ÷ revenue |
| Net margin | 30.0% | 29.7% | Net income ÷ revenue |
| Gross margin (Yahoo basis) | 63.2% | 61.5% | Yahoo gross profit ÷ revenue |
| Free cash flow margin | 34.0% | 36.6% | Free cash flow ÷ revenue |
Valuation
TTM P/E of 28.5x and forward P/E of 27.7x are above the peer medians (25.4x and 20.0x), and the PEG on 5.6% FY27 EPS growth is 4.9.
5aP/E trend
The sum of the last four quarters' diluted EPS (0.53, 0.91, 1.03, 0.93) is $3.40, so TTM P/E is 28.5x, or 28.6x on Yahoo's displayed $3.39. Year-end P/E is the year-end close ÷ annual diluted EPS (23.9x in 2023, 25.3x in 2024, 23.0x in 2025). The forward P/E of 27.7x uses next-12-month EPS of $3.50; FY26 and FY27 EPS estimates are $3.34 and $3.53
The Nov 10 close of $96.91 is 28.5x TTM EPS of $3.40 and 27.7x next-12-month EPS of $3.50. Both are above the peer medians (25.4x and 20.0x), and the PEG on 5.6% FY27 EPS growth ($3.34 to $3.53) is 4.9
5bPrice Range · 52-Week vs. External Targets
52-week range is intraday (low 1/7 · high 11/5) · External price targets: Yahoo Finance, 23 analysts (Buy 20·Hold 3·Sell 1)[S4]
5cPeer Multiples Comparison
| Company | PER (TTM) | Forward PER | P/S | Market Cap |
|---|---|---|---|---|
| Coca-Cola KO | 28.5x | 27.7x | 8.1x | About $414.79B |
| PepsiCo PEP | 18.0x | 16.7x | 2.0x | About $195.70B |
| Keurig Dr Pepper KDP | 34.5x | 15.0x | 2.2x | About $51.16B |
| Mondelez MDLZ | 21.0x | 20.0x | 2.1x | About $84.52B |
| Monster Beverage MNST | 41.0x | 35.7x | 9.3x | About $88.75B |
| Procter & Gamble PG | 25.4x | 23.7x | 4.4x | About $390.92B |
Nov 10 close · peer medians: TTM P/E 25.4x, forward P/E 20.0x, P/S 2.2x (five peers) · Coca-Cola P/S 8.1x[S7] · Peers are five US-dollar companies (PEP, KDP, MDLZ, MNST, PG), Yahoo Finance values · Market cap and P/S use the $414.79B Yahoo value (9/30 balance-sheet share count), slightly different from the $416.86B and 8.2x in Yahoo's peer table · KDP's TTM P/E of 34.5x looks inflated by depressed trailing EPS, far from its 15.0x forward P/E
Chart & Options
The $96.91 close is above the 5-, 20-, 60-, 120- and 200-day averages and 0.5% below the 52-week high of $97.39. RSI is 67.8, close to the overbought line of 70.
6aKey Price Levels Above and Below Current Price
Each colored bar matches the same-colored line on the chart; the percentage is the distance from the current price (green above · red below)
6bTechnical Indicators
6cOptions Market
Yahoo options at collection time · calls are 36.4% of volume · max pain $95 for Nov 13 expiry and $90 for Nov 20
News & Schedule
After the Oct 27 results and raised outlook, five price targets rose on Oct 28, two officers sold $8.38M on Nov 2 and Nov 5, and the Indian bottling parent filed draft IPO papers on Nov 6–7 (per reports).
7aNews
11/6 Volume 18.42M shares
11/5 Volume 31.05M shares
11/2 Volume 22.71M shares
10/28 Volume 13.17M shares
10/27 Volume 17.67M shares
7bUpcoming Events
Macro
The 4.98% 10-year yield is 1.4pp above the 3.6% forward earnings yield, and the company says currency adds about 3pp to this year's EPS.
Wall Street View
The average price target of 23 analysts is $98.43, 1.6% above the close, and all five changes after the Oct 28 results were raises.
9aExternal Target Price Range
9bRecent Opinions by Firm
| Institutions | Opinion | Previous | Target Price | Change | vs. Close |
|---|---|---|---|---|---|
| Freedom Broker | Hold | 85 | 89 | Target raised | −8.2% |
| UBS | Buy | 104 | 106 | Target raised | +9.4% |
| Citigroup | Buy | 102 | 103 | Target raised | +6.3% |
| JPMorgan | Buy | 95 | 98 | Target raised | +1.1% |
| TD Cowen | Buy | 100 | 104 | Target raised | +7.3% |
Yahoo Finance: 23 price targets · average $98.43 (high $106, low $80) · 24 ratings: 20 Buy, 3 Hold, 1 Sell · all five changes above came after the Oct 28 results[S4]
Risk Analysis
The two biggest risks are a high multiple against slowing growth and up to $14B in extra payments if the IRS appeal is lost.
| Risk | Type | Likelihood | Impact | Dates to Watch |
|---|---|---|---|---|
| High multiple against growth (forward P/E 27.7x vs FY27 EPS +5.6%) | Price | Medium | High | Q4 results |
| Up to about $14B in extra payments if the IRS appeal is lost | Financial | Medium | High | Ruling date unknown |
| Africa bottler sale effect (2027 revenue about −8%, EPS about −2%) | Earnings | High | Medium | Q4 results |
| North America volume stays flat | Earnings | Medium | Medium | Q4 results |
| Higher rates (10-year yield 4.98% vs a 3.6% earnings yield) | Price | Medium | Medium | Next rate data |
| Officer sales of $8.38M (Perez, Quan) | Price | Low | Low | Next Form 4 |
Likelihood and impact rated High·Medium·Low · When it clears: Resolves with: Q4 2026 results and the 2027 outlook (date TBD) · the close of the Africa bottler sale during Q4 · Nov 13 and Nov 20 options expiries · the IRS appeal ruling (timing unknown)
Checkpoints & Open Questions
The two key checks are the 2027 outlook due with Q4 results and the close of the Africa bottler sale during Q4.
11aCheckpoints
11bOpen Questions
Sources & Data Dates
Figures without a source are not published.
| ID | Type | Provider | Content | As-of Date |
|---|---|---|---|---|
| S1 | Price and indicators | Yahoo Finance | Closes, moving averages, RSI, 52-week range, Supertrend, Bollinger bands | 2026.11.12 |
| S2 | Financials | Yahoo Finance quarterly and annual statements (through the Sep 2026 quarter) | Quarterly revenue, earnings, cash flow, balance sheet, share count | 2026.11.12 |
| S3 | Company results | https://investors.coca-colacompany.com/news-events/press-releases/detail/1176/coca-cola-reports-third-quarter-2026-results-and-raises-full-year-guidance | Oct 27, 2026 Q3 results and outlook (organic revenue growth of at least 5%, comparable EPS growth of at least 11%, free cash flow of at least $13.0B), regional volume, Africa bottling sale assumption and 2027 considerations. The same-day 8-K (Item 2.02) and Oct 28 10-Q were checked by item number only | 2026.11.12 |
| S4 | Targets and consensus | Yahoo Finance | Rating distribution, price targets, five changes | 2026.11.12 |
| S5 | Options | Yahoo Finance | Put/call ratio, volume by strike, max pain | 2026.11.12 |
| S6 | Insider trades | Yahoo Finance (Form 4 summary) | Last 60 days: two officers sold $8.38M (Perez $6.41M, Quan $1.97M), no purchases | 2026.11.12 |
| S7 | Peer comparison | Yahoo Finance | P/E and P/S of PEP, KDP, MDLZ, MNST, PG | 2026.11.12 |
| S8 | News and reports | Just Drinks Nov 9 and Indian media (IPO draft papers), Bloomberg Law June article (IRS appeal), Yahoo news headlines | HCCH draft IPO papers (offer for sale cutting the stake from about 60% to 45%), the IRS appeal with $6B paid and about $14B more at issue, June oral argument. Filings and court documents were not opened | 2026.11.12 |
Prices as of the Nov 10, 2026 close (last completed close) · financials for Q3 2026 (Yahoo Finance, cross-checked with the Oct 27 company release) · next earnings date not yet announced
※ Based on research team debate tally · Tally · Of six issues: Bull 4 (the raised outlook, the core issue worth 2 votes, plus bottler sale 1 vote and volume 1 vote), Bear 3 (valuation, IRS case and target upside = 3 votes), on hold 0. A one-vote gap gives HOLD