Coca-Cola Anticipates Strong Quarter, Outperforming PepsiCo
Coca-Cola (KO) is anticipated to deliver another solid quarter as it solidifies its lead over rival PepsiCo (PEP). The beverage giant is set to release its fourth-quarter earnings report before the market opens on Tuesday and provide 2025 guidance.
Analysts' Expectations
Wall Street analysts forecast Q4 revenue of $10.67 billion and earnings per share of $0.52. They also estimate a price/mix increase of 6.71% and a decline in unit case volume growth of 0.21%.
Growth Drivers
Coca-Cola's growth is attributed to its ability to balance volume growth with price increases. Over the past year, shares have risen 7%, outpacing PepsiCo's 16% decline.
Challenges
Despite its strong performance, Coca-Cola faces headwinds such as cautious consumers, unfavorable commodity costs, and challenging international trends. The strengthening dollar also poses concerns for international earnings growth.
Key Factors to Watch
Analysts will monitor the company's performance in Latin America and its ability to continue delivering earnings growth. Potential tariffs and inflation on agricultural commodities also warrant attention.
Emerging Markets and New Products
CFRA analyst Garrett Nelson anticipates strong sales in emerging markets and from newer products like Coke Energy and AHA flavored sparkling water.
Product Diversification
One risk identified by Nelson is Coca-Cola's lack of product diversification, particularly in the food and snack segment.
Partnerships and Promotions
Coca-Cola's collaboration with fast food chains like McDonald's and Costco is expected to support its sales.