KO · Coca-Cola
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $102.00
Note written ·
Price against the kill line
2.7% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $102.00, on record since 11 November 2026. The shares are up 14.8% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $102.00, well over the $98.38 52-week intraday high of 12 November 2026, which would show the shares leading; or 2027 guidance in the fourth-quarter report for currency-neutral comparable EPS growth of at least 9%.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Consumer Staples
Quarter to 2 October 2026, filed 28 October 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 13,380
- Revenue, change on a year (%)
- +7.4
- Gross margin (%)
- 63.2
- Operating margin (%)
- 33.4
- Free cash flow, four quarters ($M)
- 14,282
- Net cash, cash less debt ($M)
- −27,861
- Price to earnings (×)
- 29.2
- Enterprise value to sales (×)
- 8.9
All filed numbers
What Coca-Cola reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 13,380 | +7.4 | 63.2 | 33.4 |
| first filed | 13,380 | +6.7 | 62.9 | 34.9 |
| first filed | 12,472 | +12.1 | 63.0 | 35.0 |
| first filed | 11,822 | +2.4 | 60.0 | 15.6 |
| first filed | 12,455 | +5.1 | 61.5 | 32.0 |
| first filed | 12,535 | +1.4 | 62.4 | 34.1 |
| Pre-tax income ($M) | 4,833 |
| Net income ($M) four quarters: 14,629 | 4,009 |
| Diluted shares, change on a year (%) against the quarter to 26 September 2025 | 0.0 |
| Operating cash flow ($M) | 16,227 |
| Capital spending ($M) | 1,945 |
| Free cash flow ($M) | 14,282 |
| Cash and short-term investments ($M) | 13,685 |
| Debt ($M) long-term debt and finance leases | 41,546 |
| Net cash, cash less debt ($M) | −27,861 |
| Deferred revenue ($M) | Not reported |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 3,571 |
| Inventory ($M) | 4,410 |
| Shareholders' equity ($M) | 37,372 |
| Market value ($M) | 426,964 |
| Enterprise value, market value plus net debt ($M) | 454,825 |
| Enterprise value to sales (×) | 8.9 |
| Enterprise value to operating income (×) | 29.7 |
| Price to earnings (×) | 29.2 |
| Price to book value (×) | 11.4 |
| Free-cash-flow yield (%) | 3.3 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 1.1% of shares outstanding sold short, 3.0 days of average trading to cover, −6.7% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $24.5M |
| 12 monthsfrom | $0 | $251.9M |
The thesis
Coca-Cola's shares are more likely to lag the S&P 500 over the next three months. At about 28 times forward earnings and above the average analyst target, the raised 2026 outlook already looks priced in. President and Chief Financial Officer John Murphy speaks at the Morgan Stanley Global Consumer & Retail Conference on 2 December 2026; the fourth-quarter report with first 2027 guidance, expected around 10 February 2027, settles the case.
The rating is Low because the rally since the 27 October 2026 report has come from a higher multiple while earnings forecasts barely moved. After the quarter, consensus normalized earnings per share (EPS) rose by about a penny, to $3.53 for 2027 and $3.79 for 2028, against $3.34 for 2026 (TIKR, updated 4 November 2026). The shares closed at $97.44 on 12 November 2026, above MarketBeat's $97.26 consensus target of 11 November 2026.
What the price reflects: TIKR put the forward price/earnings ratio at about 28 times on 4 November 2026, just under the five-year high of 28.1 times set on 22 October 2026 and against a five-year average of 23.4 times. At that level the market already assumes the 2026 guidance is met and that the multiple holds through the divestiture drag of 2027.
Bullish and bearish views on The Coca-Cola Company
The bull case on The Coca-Cola Company (KO), in brief: guidance rose a third time in 2026. The bear case: the multiple sits near a five-year high.
Bull case
- Guidance rose a third time in 2026. On 27 October 2026 the company lifted 2026 comparable EPS growth to at least 11% from 9–10%, currency-neutral comparable EPS growth to at least 9% from 7–8%, and organic revenue growth to at least 5% (company 8-K).
- Global volume growth held at 5%. Unit case volume rose 5% in the third quarter, matching the second, with Asia Pacific and Latin America each up 6% (company 8-K, 27 October 2026).
- Margins widened. Comparable operating margin rose to 32.9% in the third quarter from 31.9% a year earlier (company 8-K, 27 October 2026).
- Most brokers raised targets after the report. On 28 October 2026 DBS went to $106 from $98, TD Cowen to $104 from $100, Morgan Stanley to $103 from $100, Citigroup to $103 from $102, Wells Fargo to $100 from $90 and JPMorgan to $98 from $95 (TIKR and MarketBeat). MarketBeat counted 1 Strong Buy, 20 Buy and 3 Hold ratings on 11 November 2026.
- The bottler sell-down continues. Hindustan Coca-Cola Holdings, parent of the Indian bottling business, filed draft papers for an initial public offering in India (fiscal.ai, 8 November 2026). The US KFC account moves from Pepsi to Coca-Cola from January 2027 (Fox Business, 16 October 2026).
Bear case
- The multiple sits near a five-year high. TIKR put the forward price/earnings ratio at about 28 times on 4 November 2026 against a 23.4-times five-year average; Bernstein cited a 23-times 10-year average on 3 November 2026. MarketBeat listed a trailing ratio of 28.72 on 11 November 2026.
- The price has passed the average target. The $97.44 close of 12 November 2026 is above MarketBeat's $97.26 consensus and Bernstein's $95 target, set with a Market Perform rating on 3 November 2026 (TIKR). Freedom Broker's target is $89 with a Hold rating (28 October 2026).
- North American volume stalled. Unit case volume there was flat in the third quarter after 3% growth in the second (company 8-K, 27 October 2026). On 9 November 2026 the administration proposed narrowing food-assistance eligibility, which officials estimate could block 6.3 million people (Benzinga).
- Part of the revenue beat was timing. Concentrate sales rose 7%, two points ahead of unit case volume because of shipment timing, and management expects slight destocking in the fourth quarter (company 8-K and Benzinga, 27 October 2026).
- 2027 reported growth shrinks. The company flagged about an 8% acquisition-and-divestiture headwind to 2027 comparable net revenue and about 2% to comparable EPS, plus a slight currency headwind (company 8-K, 27 October 2026).
- Executives sold into the high. Executive vice president Nancy Quan exercised options on 20,585 shares and sold them at $95.62 on 5 November 2026; executive vice president Beatriz Perez did the same with 67,548 shares at an average of $94.91 on 2 November 2026 (SEC Form 4 filings). Quan and Bruno Pietracci also sold after option exercises at $90.39 and $90.93 on 19 August 2026 and 20 August 2026.
Price setup
The shares closed at $97.44 on 12 November 2026, 1.0% below the 52-week intraday high of $98.38 set that same session. The highest close of the past 52 weeks was $97.57 on 11 November 2026. The 52-week closing low was $67.54 on 7 January 2026.
The shares fell to a $91.18 close on report day, 27 October 2026, and recovered that drop by 2 November 2026 (StockAnalysis daily price history). Closes then climbed from $95.73 on 5 November 2026 to $97.57 on 11 November 2026. On adjusted daily closes the 50-day moving average was $90.54 and the 200-day moving average $82.53 on 12 November 2026, and the 3-month change was 11.8%.
The case turns on the $98.38 high. Closes held well above it would mean buyers paying more than 28 times forward earnings for a business with consensus EPS of $3.53 for 2027 against $3.34 for 2026 (TIKR, 4 November 2026). A fall back toward the 50-day average would erase the gains made since the report.
Catalysts ahead
- 2 December 2026: President and CFO John Murphy presents at the Morgan Stanley Global Consumer & Retail Conference, 11 a.m. ET. The first management update since the 27 October 2026 report: shows whether the at-least-11% comparable EPS growth guide for 2026 holds, whether fourth-quarter destocking is on plan, and any early read on 2027.
- ~31 December 2026 (est.): Expected closing of the sale of African bottling operations, subject to regulatory approval. Completes another step toward a concentrate-focused, higher-margin business and fixes the size of the 2027 divestiture drag; a regulatory delay would push that out.
- ~4 January 2027 (est.): KFC begins switching US restaurants from Pepsi to Coca-Cola. First period in which the KFC account adds US fountain volume, against a third quarter in which North American volume was flat.
- ~10 February 2027 (est.): Fourth-quarter 2026 report and first full-year 2027 guidance. Shows whether 2026 closes at or above the at-least-11% comparable EPS growth guide, whether North American volume grows again, and how large the 2027 divestiture and currency headwinds are.
What would change the view
A daily close above $102.00, well over the $98.38 52-week intraday high of 12 November 2026, which would show the shares leading; or 2027 guidance in the fourth-quarter report for currency-neutral comparable EPS growth of at least 9%.
What it trades with
The shares move with defensive consumer staples more than with the broad market. MarketBeat listed a beta of 0.28 on 11 November 2026. On 9 November 2026 all 11 sectors rose with growth sectors leading (Benzinga), and on 5 November 2026 Benzinga reported Nvidia's forward price/earnings ratio of 15.2 below those of 22 of 33 consumer staples stocks, a gap that makes staples the more expensive side of any rotation.
PepsiCo is the direct competitor, and the KFC account change sharpens the comparison. Most revenue is earned outside the US, so a firmer dollar weighs on reported earnings; the company already flags a slight currency headwind for 2027.
The evidence, claim by claim (8)
- Third-quarter 2026 net revenues rose 7% to $13.38 billion; organic revenues rose 7% on 7% concentrate sales growth and 1% price/mix; global unit case volume grew 5%, North America flat. Third-quarter 2026 earnings release (8-K), 27 October 2026 · as of
- 2026 guidance raised: organic revenue growth at least 5%, comparable EPS growth at least 11% (from 9–10%), currency-neutral comparable EPS growth at least 9% (from 7–8%). Third-quarter 2026 earnings release (8-K), 27 October 2026 · as of
- The company flagged about an 8% acquisition-and-divestiture headwind to 2027 comparable net revenue and about 2% to comparable EPS, plus a slight currency headwind. Third-quarter 2026 earnings release (8-K), 27 October 2026 · as of
- Consensus normalized EPS stood at $3.34 for 2026, $3.53 for 2027 (from $3.52) and $3.79 for 2028 (from $3.78); forward price/earnings about 28 times against a 23.4-times five-year average. TIKR, updated 4 November 2026 · as of
- MarketBeat's consensus target was $97.26 with 1 Strong Buy, 20 Buy and 3 Hold ratings; trailing price/earnings ratio 28.72; beta 0.28. MarketBeat-syndicated report, The Stock Observer, 11 November 2026 · as of
- EVP Nancy Quan exercised options on 20,585 shares at $50.44 and sold 20,585 shares at $95.62 on 5 November 2026. SEC Form 4 filed 9 November 2026 · as of
- EVP Beatriz Perez exercised options on 67,548 shares and sold 67,548 shares at an average of $94.91 on 2 November 2026. SEC Form 4 filed 4 November 2026 · as of
- Coca-Cola announced that President and CFO John Murphy will present at the Morgan Stanley Global Consumer & Retail Conference on 2 December 2026 at 11 a.m. ET. Coca-Cola press release, 11 November 2026 · as of
Sources
- Coca-Cola’s Price Targets Now Run From $89 to $106. Do the Estimates Back the Top End? · tikr.com ·
- The Coca-Cola Company Announces Participation in Morgan Stanley Global Consumer & Retail Conference · investors.coca-colacompany.com
- Coca-Cola (NYSE:KO) Sets New 1-Year High · thestockobserver.com ·
- Coca-Cola Stock Is Up 36% This Year. Bernstein’s New $95 Target Says the Quarter Is Priced In · tikr.com ·
- The Coca-Cola Company (KO) Stock Price History 1968-2026 · stockanalysis.com
- Coca-Cola's $20B tax fight reaches federal appeals court this week · investmentnews.com
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