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Takeaways
- Coca-Cola stock should be a stable consumer staple amid the uncertainty surrounding the Trump administration's tariffs, JPMorgan analysts wrote Monday.
- Analysts have lowered their Coca-Cola earnings forecasts for 2025 as the beverage manufacturer is due to report its first-quarter results in a week.
- The analysts called Coca-Cola a "relatively more defensive stock" that should be able to continue increasing sales this year.
JPMorgan analysts wrote in a note on Monday that Coca-Cola is well-positioned despite the uncertainty surrounding the Trump administration’s new tariffs.
Analysts increased their price target for the soda maker to $78 (up from $74), while maintaining their “overweight” ratings in a preview of its first-quarter earnings, which will be released on April 29, 2019. The new price target brings JPMorgan analyst closer to the analyst consensus, which is $78.58 as compiled by Visible Alpha. They are among 11 analysts who have a “buy’ rating, and only one has a ‘hold’ rating on the stock.
“While KO stock is not immune from tariffs and macro headwinds it is a more defensive stock which will likely deliver the highest returns. [organic sales growth] JPMorgan analysts wrote that they expect to have a coverage universe of 2025.
Analysts See 'Moderating Consumption Environment' in US
They lowered their estimates of Coca-Cola’s earnings and sales growth for the first quarter and full year due to “a moderating consumption climate in the U.S.,” they expect that this will be partially offset with a softening currency.
Analysts said that Coca-Cola has a relatively low exposure risk to tariffs. The analysts said that the company’s biggest risks are likely imported juices and aluminum. They said Coca-Cola’s management “doesn’t perceive a potential impact” from possible aluminum price inflation that could “derail its outlook.”
Analysts said that if the current market environment continues “we believe KO will continue outperform its peers and broader market.”
Coca-Cola’s shares fell less than 1% on Monday to $72.77 amid a general market decline. They have risen by 16% since the beginning.
