What’s Next For Coca-Cola Stock After A Solid Q4?

Coca-Cola (NYSE: KO) recently released its Q4 results, with revenues and earnings exceeding the street estimates. It reported revenue of $11.5 billion and adjusted earnings of $0.55 per share, compared to the consensus estimates of $10.7 billion and $0.52, respectively. The company continued to benefit from better price realization. Also, Coca-Cola’s outlook for 2025 aligned with the market expectations. These factors boded well for KO stock, up 5% post the results announcement.

KO stock, with 13% returns since the beginning of 2024, has underperformed the S&P 500 index, up 27%. A tepid volume growth lately has weighed on its stock price growth over the last year. But, if you want an upside with a smoother ride than an individual stock, consider the High-Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception.

How Did Coca-Cola Fare In Q4?

Coca-Cola’s revenue of $11.5 billion reflected a 6% y-o-y growth on a reported basis. However, sales grew a solid 14% on an organic basis, led by a 9% growth in price/mix and a 5% rise in concentrate sales. Looking at segments – Europe, the Middle East and Africa saw 17% organic sales growth, Latin America sales were up 25%, North America up 15%, Asia Pacific 1%, and Global Ventures up 3%.

While Coca-Cola has lately struggled with volume growth, its Q4 volume was up 2%, which is positive for the company. The company also saw a 90 bps y-o-y rise in operating margin to 24% in Q4. Higher revenues and margin expansion resulted in the bottom-line rising 12% to $0.55 during the quarter. Looking forward, Coca-Cola expects its organic sales to rise between 5% and 6%, aided by both higher volume and pricing. It expects its bottom line to rise between 2% and 3%, aligning with the consensus estimate of a 2.5% y-o-y growth. While investors worried about how President Trump’s metal import tariffs would affect Coca-Cola’s profits, the company’s management clarified that packaging represents a minor portion of total costs and the tariff impact would remain manageable.

What Does This Mean For KO Stock?

KO stock climbed following its earnings announcement, driven by strong Q4 performance and guidance that met market expectations. Notably, the increase in KO stock over the last four-year period has been far from consistent, although annual returns were considerably less volatile than the S&P 500. Returns for the stock were 11% in 2021, 11% in 2022, -4% in 2023, and 9% in 2024.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, is less volatile, and it has comfortably outperformed the S&P 500 over the last four-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.

Given the current uncertain macroeconomic environment around rate cuts and ongoing trade wars, could KO face a similar situation as it did in 2021, 2023, and 2024 and underperform the S&P over the next 12 months — or will it see a strong jump? While we will soon update our model for Coca-Cola to reflect the latest results, we think there’s some room for growth. Why? At its current levels of around $68, KO is trading at 23x trailing earnings of 2.88 per share, lower than the stock’s average P/E ratio of 25x over the last five years. The company’s solid volume growth, improving margins, and management’s reassurance about limited aluminum tariff impacts support a case for a higher valuation multiple. We think that despite the recent stock appreciation, KO stock remains an attractive long-term investment opportunity.

While Coca-Cola stock looks like it can see higher levels, check out how Coca-Cola Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.

[1] Returns as of 2/12/2025
[2] Cumulative total returns since the end of 2016