KO - Embedded Expectations Analysis - 2021 08 24
The Coca-Cola Company (KO:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 32.2x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about sustained execution strength, pricing headwinds, and their ability to meet future guidance.Specifically, management may lack confidence in their ability to sustain strong execution in Turkey and Pakistan, drive share gains through disciplined innovation and effective marketing, and achieve their Beverages for Life ambition. Moreover, management may have concerns about pricing headwinds, the impact of fragmented trade in their B2B operations, and their unfamiliarity with the alcohol business. Also, they may lack confidence in their ability to meet elevated guidance, expand their non-black tea segment globally, and sustain global collection rates in packaging. Finally, management may have concerns about a leveling out of concentrate shipments, and they may be overstating AHA sparkling water's rapid consumer traction and the agility and adaptability of their business.
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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