Financial Trading Blog
Stock of the day 03/02/2016 – The Coca-Cola Co
Can the company climb back to December’s 12 month highs with its fourth quarter figures next Tuesday?
From that $36.56 Black Monday nadir Coca-Cola had managed to rise back to $42.20 by the eve of its third quarter results in October. Those figures saw a worse-than-expected fall in revenue, dropping 5% to $11.4 billion thanks to the stronger dollar, with almost a third wiped off of the company’s net income, which slipped to $1.4 billion. Still drinks were the star of Coke’s quarter, sales rising 6% worldwide; the company’s namesake beverages (and the rest of the soda division), on the other hand, only rose 3%.
(Source: IT-Finance.com 03/02/2016)
Whilst the stock did see an initial bounce to $43.85 in the aftermath of its third quarter results, investors weren’t impressed for long, leading Coca-Cola to hit $41.45 by the middle of November. However, the company soon began to pick up speed, reaching $43.92 a month later, before entering 2016 at $42.34. The troubling trading of the New Year, however, continued to play havoc with Coke’s price, veering between lows of $40.76 and highs of $43.36; it sits a current trading price of $42.45 (IT-Finance.com, 03/02/2016).
It was revealed at the start of February that Coca-Cola managed to increase its global market share of the soda sector to 48.5% during 2015; whether this translate to an investor-impressing set of fourth quarter figures, however, is another matter. Still drinks will be the sector to watch, dominating as it has for the past few quarters, whilst investors will be keen to see if Coca-Cola has managed to mitigate the slowing growth in its soda division (something the company has attempted to achieve through offering its unhealthier drinks in smaller packaging). Then there are the macro-considerations, namely the stronger dollar and China’s economic slowdown, both of which took percentage points of the company’s growth in Q3.
The Coca-Cola Co has a consensus rating of ‘Hold’ with an average target price of $45.56.
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