Coca-Cola’s (NYSE: KO) stock price can bubble to new highs this year because its Q1 results and guidance update show its everywhere-is-local approach to business and international growth agenda is working.
The company faces headwinds in 2025 like virtually every other S&P 500 business, yet it still produces industry-leading organic growth, solid margin, and optimistic guidance.
The company updated its 2025 outlook to include the impact of FX headwinds and macroeconomic factors, but reaffirmed its growth and earnings targets, stating that the impacts were manageable.
The takeaway for investors is that the Coca-Cola Company is expected to grow 5% to 6% organically this year and maintain a slightly faster pace on the bottom line.
The Coca-Cola Company Grows, Increases Share, Guides Favorably
The Coca-Cola Company’s reported results don't fully reflect its underlying strength. The company’s revenue contracted by 2% on a reported basis, slightly below consensus figures, but is offset by positive internal metrics, including case volume, concentrate sales, and organic revenue growth. The company grew 6% organically, driven by a 5% increase in price and mix, as well as a 1% increase in concentrate sales. Global unit case volume grew by 2% and is expected to remain strong this year. Efforts to capture share at major regional events are paying off, with increased sales and market share expected to drive leveraged top-line growth when macroeconomic headwinds ease.
The margin news is better. The company’s localized approach to bottling and delivery and operational quality improvements helped offset headwinds, including a 500-basis-point impact from FX conversion. The critical details are that FX-neutral operating income grew by 10%, the comparable operating margin improved by 140 basis points, and adjusted EPS of $0.73 is up 1% year-over-year, despite a contraction in the top line.
Coca-Cola’s Dividend Growth is Reliable in 2025
[content-module:DividendStats|NYSE: KO]Coca-Cola’s status as a Dividend King is among its attractions. The Q1 results and guidance align with the outlook for distribution sustainability, including the low single-digit compound annual growth rate (CAGR).
Share repurchases are also in the equation, at least offsetting the count and reducing it incrementally in Q1 2025 and for the full fiscal year in 2024. Regarding the balance sheet, the company’s debt level remains manageable at 1.55x equity, and equity increased by 5%.
The KO analysts' trends are unlikely to change because of these results and the outlook. They are strongly bullish, with increasing coverage, firming sentiment following recent upgrades to Buy or Strong Buy levels, and an upward trend in price target revisions.
The consensus reported by MarketBeat is a Buy, with a bias toward Strong Buy, due to the low number of Hold or Sell ratings (5% of 20 analysts) and the increasing number of Strong Buys. The consensus price target is significant because it has increased by 10% in 12 months, putting the market at an all-time high, with the high-end range adding more than 10%.
The Coca-Cola Company Can Set New Highs Before the Second Half
The price action in KO stock showed some weakness early in the session following the release, but quickly regained its footing. The subsequent action shows support at critical levels, including the 30-day EMA and setting up for a run to new highs.
A move to new highs could come before the end of the quarter and lead to a sustained rally in the second half. In this scenario, this market could move to the high end of the analysts' range, near $85, and potentially higher if positive news regarding tariffs or trade emerges.
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