Knowing facts before you bet on it

Coca-Cola (Ko) has recently been one of the most sought stocks on Zacks.com. Perhaps you would like to see some of the facts that could affect the performance of the stock at short notice.

Last month, the shares of the largest beverage maker in the world have returned to the Zacks S&P 500 Composite's +12.7% change. During this time, the Zacks drinks – refreshing beverage industry, in which Coca -Cola falls, lost 2.8%. The key question now is: What could be the future direction of the stock?

While media publications or rumors about a significant change in the business prospects of a company usually carry out its shares as a “trend” and lead to an immediate change in price, there are always some basic facts that ultimately dominate the purchase and hate decision finding.

Instead of concentrating on anything else, we prioritize the evaluation of the change in the profit projection of a company at Zacks. This is due to the fact that we believe that the current value for its shares is determined by the cash value of his future profit current.

We essentially take a look at how analysts that cover the shares reveal their profit estimates in order to reflect the effects of the latest business trends. And if the profit estimates for a company rise, the current value for its shares increases. A higher atmosphere to be used than the current market price gives investors the interest for buying the share, which leads at a higher price. For this reason, empirical research shows a strong correlation between trends in the revisions of the yield estimate and short -term share price movements.

Coca -Cola is expected to make a profit of $ 0.83 per share in the current quarter, which corresponds to a change of -1.2%compared to the previous year. In the past 30 days, the Zacks Consensus estimate has changed by -1.4%.

For the current financial year, the consensus result is $ 2.96 to a change of +2.8% compared to the previous year. This estimate has changed +0.2%in the last 30 days.

For the next financial year, the consensus assessment of $ 3.21 shows a change of +8.2% compared to what Coca-Cola is expected a year ago. In the past month the estimate has changed +0.4%.

With an impressive externally tested track balance sheet, our proprietary stock assessment tool and the Zacks-Rank-Rank-Rank-Rank-Rank is more conclusive for the short-term price-performance of a share, since it effectively uses the power of the profit assessment revisions. The size of the recent change in the consensus estimate and three other factors in connection with the profit estimates led to a Zacks rank No. 2 (purchase) for Coca-Cola.

The following table shows the development of the company's 12-month consensus EPS EPS estimate:

12-month consensus EPS estimate for KO _12Monthepscharturl

While profit growth is probably the most superior indicator of a company's financial health, nothing happens than such if a company cannot increase its income. After all, it is almost impossible for a company to increase its income over a longer period of time without increasing its income. It is therefore important to know the potential sales growth of a company.

For Coca-Cola, consensus sales for the current quarter of $ 12.59 billion shows a change of +1.8%compared to the previous year. For the current and next financial years, estimates of $ 48.17 billion and 50.72 billion USD +2.4% or +5.3% make changes.

In the last reported quarter, Coca-Cola achieved sales of $ 11.13 billion, which corresponds to a change of -1.5%compared to the previous year. EPS of $ 0.73 for the same period comparable to USD 0.72 a year ago.

Compared to the Zacks Consensus estimate of 11.12 billion US dollars, the registered income is a surprise of +0.1%. The EPS surprise was +2.82%.

The company defeated consensus -epseps estimates in each of the following four quarters. The company exceeded consensus sales every time.

Without taking into account the assessment of a share, no investment decision can be efficient. When predicting the future price performance of a share, it is crucial to determine whether the current price correctly reflects the internal value of the underlying business and the company's growth prospects.

During the comparison of the current values of the evaluation advantages of a company, such as price-to-profit (P/E), Price-to-Sales (P/S) and Price-to-Cash-Flow (P/CF), with its own historical values, to determine whether its shares are rather evaluated, overvalued or undervalued, the relative position is comparable to prices for the relative position.

The Zacks Value Style Score (part of the Zacks Style Scores Systems), which pays attention to the grade of stocks from A to F both traditional and unconventional valuation metrics (AA is better than a C; and so on) is rather helpful to identify whether a share is overrated, legally valued or temporarily accommodated.

Coca-Cola is evaluated on this front to F, which indicates that it deals with his colleagues with a bonus. Click here to display the values of some evaluation metrics that have driven this grade.

The facts discussed here and a lot of other information about Zacks.com could help determine whether it is worth paying attention to the Coca-Cola market or not. However, his Zack's rank #2 suggests that he can exceed the wider market at short notice.

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Cocacola Company (the) (KO): Free stock analysis report

This article was originally published in Zack's Investment Research (Zacks.com).

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