Is A The Coca-Cola Company (KO) Big Rally On The Horizon?

Investors will get their next glimpse of KO’s Q4 earnings on February 12. Analysts are forecasting revenue to suffer decline of -6.5 percent to $7.03B in the next fiscal quarter, while earnings are seen soaring by nearly 10.26 percent to $0.43 per share. History has shown that shares in The Coca-Cola Company have gone down on 19 different earnings reaction days and are predicted to add 0.01 percent when the company reports upcoming earnings. In last reported earnings results, it earned $0.58 per share, better than the $0.55, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $8.26B, better than the $8.17B analysts expected. Earnings are estimated to increase by -26.4 percent this year, 6.43 percent next year and continue to increase by 6.8 percent annually for the next 5 years.

The stock is currently hovering around the first support level of $47.09. Below this, the next support is placed in the zone of $46.84. Till the time, the KO stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 46.28 on daily chart, which may remain a cause for concern. If the price breaks below $46.84 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $47.47 mark may result into a pull-back move towards $47.61 level.

On 11th of January, The Coca-Cola Company (NYSE:KO) shares ended higher after a volatile session. The shares accumulated 0.27 points or 0.57 percent at $47.34 with a light trade volume of 10.936 million shares. After opening the session at $47.29, the shares went as high as $47.355 and as low as $46.97, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $200 billion and now has 4.23 billion shares outstanding. The Coca-Cola Company (KO) stock has lost -4.44 percent of market value in 21 trading days.

KO stock has a trailing 3-year beta of 0.56, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was $1.57 a share in the trailing twelve months. The stock’s value has fallen -0.02 percent year to date (YTD) against a rise of 2.76 percent in 12 month’s time. The company’s shares still trade -6.88 percent away from its 1-year high of $50.84 and 14.21 percent up from 52-week low of $41.45. The average consensus rating on the company is 2.3, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Shares of The Coca-Cola Company (KO) are trading at a P/E ratio of 31.55 times earnings reported for the past 12 months. The industry KO operates in has an average P/E of 36.74. Its P/E ratio went as low as 21.7X and as high as 41.7 over the 5-year span. Further, it is sporting a 6.2 on the Price-to-Sales ratio. Compare this with the industry average P/S of 1.97. 63.7 percent is the gross profit margin for The Coca-Cola Company and operating margin sits at 39.6 percent. Along with this, the net profit margin is 8.6 percent.

Let’s take a look at some insider activity at The Coca-Cola Company (NYSE:KO) and see the pattern. The earliest insider trade took place on 11/19/2018. Mann Jennifer K parted with a total of 15.1 thousand shares of company at average share price of $50.4. The total for the sales was set at $761.04 thousand. After this transaction, the Senior Vice President account balance stood at 30.24 thousand shares. The stock lost -6.07 percent since that insider sale. On 11/12/2018, Dinkins James L, Senior Vice President, sold 9.15 thousand shares at a price per share of $49.95. This removed 457.04 thousand shares from the insider’s fortune and the stock saw a -5.23 percent retreat in value since the news became public. This transaction left 24.09 thousand shares in the Senior Vice President account.

On 11/12/2018, Senior Vice President Perez Beatriz R performed a sale transaction worth $499.8 thousand. This sale at $49.98 each has eliminated 10 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded -5.28 percent decrease since the transaction was reported. The insider now is left with 100.76 thousand shares remaining in the account. Smith Brian John, who performs the Group President job, sold 60 thousand shares for $3 million. The disposal occurred on 11/12/2018 was priced at $50 per share. The share price plunged -5.32 percent since the reporting date. Smith Brian John now left with a stake of 114.87 thousand KO stock worth $5.44 million after the insider selling.