Executive Summary
•KO trades at 25.9x NTM P/E on the $3.48 consensus EPS (27.3x on the $3.31 FMP figure), a premium to PEP at 15.9x TTM, supported by 34.9% operating margins and unmatched brand equity
•Organic revenue growth of roughly 5 to 6% is being masked by FX translation, leaving reported NTM revenue growth at just 0.2%
•Insider selling totalled $87.9m over the last 90 days with zero open market buys, a clear sentiment headwind
•Consensus PT of $95.75 implies about 6% upside, plus a roughly 2.2% dividend yield, for a total return near 8%
Financial Snapshot
•Revenue TTM: $50.13b
•Revenue growth: +0.2% NTM (FX constrained)
•Gross margin: 61.9%
•Operating margin: 34.9%
•Net margin: 28.6%
•ROE: 42.1%
•Debt/Equity: 115.5%
•Forward EPS NTM: $3.31 (FMP) vs $3.48 (revision trend)
•FY+2 EPS: $3.53
•Dividend: roughly $1.94 per share, roughly 2.2% yield, roughly 56% payout (Not disclosed in source data)
Forward Outlook
•NTM revenue: $49.80b, roughly flat at +0.2%, as FX offsets mid single digit organic growth
•FY+2 revenue: $49.89b, implying continued FX drag into 2027
•NTM EPS: $3.31 to $3.48, +6.7% YoY growth
•FY+2 EPS: $3.53, +6.6% off NTM
•Comparable operating margin: mid 30% range, modest expansion from cost efficiencies
•Dividend payout: roughly 56 to 60% of EPS, sustainable against free cash flow
Valuation Analysis
•NTM P/E: 25.9x on $3.48 EPS (27.3x on the $3.31 FMP figure)
•NTM P/S: 7.79x
•NTM EV/EBIT: roughly 20.8x
•NTM EV/EBITDA: roughly 19.5x
•TTM P/E: roughly 30x
•PEG: roughly 3.9x on 6.7% EPS growth, expensive on a growth adjusted basis
•Relative to own 2 year history: P/E 25.9x vs 30.5x avg (-15%), EV/EBIT 20.8x vs 24.3x avg (-14%)
•Offset by EV/Rev 8.3x vs 6.0x avg (+38%, +2.1 SD) and P/BV 10.7x vs 9.0x avg (+20%)
•EQRV implied prices: $106 (P/E), $106 (EV/EBIT), $86 (EV/EBITDA), $75 (P/BV), $63 (EV/Rev)
•DCF at 9 to 10% WACC and 2 to 3% terminal growth yields intrinsic value below the current price, signalling the market embeds a substantial quality and dividend premium
•Consensus PT: $95.75, median $95, range $86 to $104
•PEP: 15.9x TTM P/E, $172.4b MC, snacks and beverages, materially cheaper multiple
•MNST: 40.4x TTM P/E, $85.5b MC, energy drinks, faster growth profile
•KDP: 33.1x TTM P/E, $44.6b MC, coffee and soft drinks, leveraged balance sheet
Key Risks & Catalysts
Risks
•FX translation drag, particularly Latin America currencies, capping reported growth
•GLP-1 adoption could structurally reduce sparkling soft drink volumes
•Insider selling of $87.9m with no open market buys, led by the Chairman
•Premium valuation on revenue and book value (EV/Rev +2.1 SD vs history)
•High leverage, Debt/Equity at 115.5%
•Price led growth has limits if consumer elasticity bites
Catalysts
•Continued fairlife and premium dairy scaling at accretive margins
•Zero sugar and smaller pack innovation
•India IPO plans and emerging market expansion
•Potential FX stabilisation lifting reported revenue
•Dividend increase and ongoing buybacks
•Q2 2026 guidance raise on volume growth
Investment Thesis
KO remains a high quality defensive compounder. The model is concentrate driven and asset light, delivering 34.9% operating margins, 42.1% ROE and durable pricing power. Organic revenue growth of roughly 5 to 6% is intact, split heavily toward price/mix with concentrate volume up only low single digits, but FX translation is wiping out the reported top line, leaving NTM revenue growth near zero. That gap between organic strength and reported weakness is the central tension in the story.
Valuation is the real debate. On earnings KO screens cheaper than its own history, with NTM P/E at 25.9x against a 30.5x two year average, and EV/EBIT 14% below trend. On revenue and book value it is stretched, with EV/Rev 2.1 standard deviations above average and an implied reversion price near $63. A DCF at 9 to 10% WACC cannot justify the current price, so the market is paying a clear quality and dividend premium. The swing factors are GLP-1 demand risk and FX, while fairlife, Topo Chico and the premium dairy portfolio are the genuine growth engine.
Recommendation: Hold with a 12 month price target of $95, implying roughly 6% upside plus a roughly 2.2% dividend for a total return near 8%. The quality is not in question, but the risk/reward is balanced at $90. Accumulate on weakness toward the $80 to $85 range, where the earnings multiple would offer a more compelling entry against the long term dividend compounding story.
