Coca-Cola Earnings: Resilient Volume Buttressed by Innovation and In-Market Execution  

We plan to raise our $58 fair value estimate for wide-moat Coca Cola by a low-single-digit percentage after digesting better-than expected second-quarter results, driven by beverage innovations and in-market execution in both premium and value offerings globally. Organic revenues grew 11% and adjusted EPS was up 17% (excluding currency impact), both ahead of our estimates (10% and 14%, respectively). Coke nudged up 2023 guidance for organic revenue to 8%-9% (from 7%-8%) and adjusted EPS growth to 5%-6% (from 4%-5%), which we view as achievable, and we plan to update our own 2023 estimates to approximate the new outlook. Our 10-year projections for mid-single-digit sales growth and low 30s average operating margins remain in place. Shares are trading in a range we'd consider fairly valued.