Analyses / KO
Defensive large-cap beverage leader. 52-week high, elevated multiples, strong dividend. +3.5% today.
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The Thesis
▲ Bull Case
Coca-Cola hit 52-week high on soda/coffee strength. Dividend yield 2.52%, payout ratio 67% sustainable. Operating margin 28.7% and net margin 27.3% reflect pricing power and scale. EPS growth 11.5% YoY outpaces revenue growth 3.7%, signaling margin expansion. Beta 0.35 provides portfolio ballast. India unit valuation catalyst ($10B target) de-risks. Insider net buying (58 buys vs 62 sells, balanced).
▼ Bear Case
Valuation stretched: P/E 25.7x, forward 26.9x, EV/EBITDA 26.1x all above historical norms for a mature beverage company. Price-to-FCF 66.6x elevated; suggests limited FCF yield relative to price. P/B 9.3x and P/S 7.4x also premium. Revenue growth only 3.7% YoY vs 11.5% EPS growth relies on buybacks and margin expansion—not sustainable long-term. At 52-week high, limited upside; pullback risk if macro softens or earnings disappoint.
Valuation
overvalued — score 38/100
KO trades at a premium to historical and sector averages on all major multiples. P/E 25.7x, forward 26.9x, EV/EBITDA 26.1x, and P/S 7.4x are all elevated for a mature beverage company. Price-to-FCF 66.6x is especially high, signaling limited FCF yield. 52-week high and lack of margin-of-safety offset quality and dividend appeal.
Technical Levels
Support · $81.40 (Daily low / near-term support) · $80.00 (Round number / entry zone low) · $77.00 (Stop-loss / 3% pullback)
Resistance · $84.14 (52-week high / current price) · $86.50 (Next resistance / +2.8%) · $90.00 (Psychological / 1-year target)
RSI: not_available
Financial Health
Score 75/100. KO has strong balance sheet health with current and quick ratios above 1.1, indicating solid liquidity. Gross and operating margins are among the best in beverages, reflecting brand power and scale. Payout ratio 67% is sustainable for a mature cash-generative business. No material solvency concerns evident in available data.
Risk Flags
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KO FAQ
Is KO a buy right now?
Coca-Cola Co's current read is a value_with_income setup with 68 confidence over a 6-12 months horizon. Valuation: overvalued. See the full bull and bear case above, or run a live analysis for the exact entry, target and stop.
Is KO overvalued?
overvalued (valuation score 38/100). KO trades at a premium to historical and sector averages on all major multiples. P/E 25.7x, forward 26.9x, EV/EBITDA 26.1x, and P/S 7.4x are all elevated for a mature beverage company. Price-to-FCF 66.6x is especially high, signaling limited FCF yield. 52-week high and lack of margin-of-safety offset quality and dividend appeal.
What are the risks of buying KO?
Valuation stretched: P/E 25.7x, forward 26.9x, EV/EBITDA 26.1x all above historical norms for a mature beverage company. Price-to-FCF 66.6x elevated; suggests limited FCF yield relative to price. P/B 9.3x and P/S 7.4x also premium. Revenue growth only 3.7% YoY vs 11.5% EPS growth relies on buybacks and margin expansion—not sustainable long-term. At 52-week high, limited upside; pullback risk if macro softens or earnings disappoint.