Prediction: Up 16% YTD, Coca-Cola Has More Upside

"Q1 2026 (reported April 28, 2026) delivered EPS of $0.86 versus the $0.81 consensus, the fourth straight beat, on revenue of $12.47 billion (up 12.07% YoY). Operating margin expanded to 35%, and free cash flow more than doubled to $1.76 billion. New CEO Henrique Braun called it a "strong start to the year" and raised FY26 comparable EPS growth guidance to 8% to 9% from a prior 7% to 8%."

"Bulls focus on three pillars. First, Coca-Cola Zero Sugar grew volume 13% across every geographic segment, with global unit case volume up 3% led by China, the US, and India. Second, the pending sale of Coca-Cola Beverages Africa in H2 2026 should structurally lift margins by removing a lower-margin bottling business, with CFO John Murphy citing "opportunity for more margin expansion in the latter half of this year." Third, FX has flipped to a 1% to 2% tailwind."

"The 24/7 Wall St. price target for Coca-Cola is $87.01 over the next 12 months, implying 8.41% upside from $80.26. Our model rates KO a buy with 90% confidence, reflecting a high-quality earnings beat and unusually low beta. That is a moderate return profile."

"KO already trades at 25x trailing earnings and 24x forward earnings, leaving little room for multiple expansion. Asia Pacific comparable currency-neutral operating income fell 17% in Q1, juice, dairy, and plant-based volumes"

Coca-Cola has a constructive outlook following a clean Q1 2026 results beat, raised full-year EPS guidance, and a stock price that has gained year to date. Q1 2026 delivered EPS of $0.86 versus $0.81 consensus, with revenue of $12.47 billion up 12.07% year over year. Operating margin expanded to 35%, and free cash flow more than doubled to $1.76 billion. A new CEO raised FY26 comparable EPS growth guidance to 8% to 9% from 7% to 8%. Key bullish drivers include strong growth in Coca-Cola Zero Sugar, expected margin improvement from the planned sale of Coca-Cola Beverages Africa, and a shift to a small FX tailwind. Risks include limited valuation upside and declines in Asia Pacific comparable currency-neutral operating income.

Read at 24/7 Wall St.