Analyst Note
| Nicholas Johnson, CFA |Wide-moat Coca-Cola’s third-quarter earnings were bound to be fraught, as investors would not only be looking for details about results and outlook but also insight into the slew of recent strategic announcements (the internal reorganization and partnership with no-moat Molson Coors for Topo Chico Hard Seltzer being the most prominent). Ultimately, the results were solid (ahead of CapIQ consensus expectations on both the top and bottom lines), and while it’s still unclear when coronavirus-induced pressures will reach their coda, the firm’s strategic initiatives support our confidence in its long-term prospects. We don’t plan to change our $54 fair value estimate, and despite rallying meaningfully from the lows in March, the shares still strike us as modestly undervalued.