KO - Embedded Expectations Analysis - 2019 05 29
The Coca-Cola Company (KO:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) Earnings, with a 28.9x Uniform P/E, implying bullish expectations for the firm. However, management has concerns about explorerbrand volume and international sales growth, new product launches, and their
innovation process.
Specifically, management may lack confidence in their ability to sustain explorer brand volume growth, increase Latin American and international organic sales growth, and maintain EPS levels, amidst currency headwinds. Moreover, they may be concerned about the progress of Costa ready-to-drink and vending machine launches, declines in North American unit case volumes, and natural disaster setbacks in Japan. Furthermore, they may be concerned about their ability to push brands into new spaces, create quality brand leadership, and track narrow and broad innovation metrics. Finally, they may be downplaying concerns about tea launches and marketing in China, the timing of SG&A expenses, and bottler refranchising headwinds.
Coca-Cola is a nonalcoholic beverage company. The company owns or licenses and markets nonalcoholic beverage brands, which it groups into the following category clusters: sparkling soft drinks; water, enhanced water and sports drinks; juice, dairy and plant-based beverages; tea and coffee; and energy drinks. The company's nonalcoholic sparkling soft drink brands are Coca-Cola, Diet Coke, Fanta and Sprite. The company markets, manufactures and sells beverage concentrates and syrups, including fountain syrups; and finished sparkling soft drinks and other nonalcoholic beverages. The company's segments are Europe, Middle East and Africa; Latin America; North America; Asia Pacific; Global Ventures; and Bottling Investments.
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