Coca-Cola Earnings: Consumer-Led Innovation and Digital Engagement Fuel Revenue Expansion
We plan to raise our $60 per share fair value estimate for wide-moat Coca-Cola by a low-single-digit percentage after digesting its strong second-quarter results and updated outlook. However, we view the stock as fully valued even after the planned increase in intrinsic valuation. Organic sales rose 15%, led by innovations, digital initiatives, and deft in-market executions, and adjusted earnings per share were up 7%. This was with a softer consumer backdrop in the US and continued instability and macro challenges across Europe, Latin America, and Asia. Coke remains poised to fuel volume and pricing growth, aided by its total beverage portfolio approach, steadfast investments in product innovation, and brand marketing. We plan to tick up our 2024 sales and adjusted EPS estimates by low-single-digit percentages to align with management’s raised guidance, while our 10-year projection for mid-single-digit sales growth and a low-30s average operating margin remains in place.