Beverages: Non-Alcoholic · #34 in the Retail 100

Coca-Cola

Our rating: selllow conviction
12-month target: $100.25 +5.7%
Expected vs. S&P 500: -10.6 ptsSee the math
Next earnings: Not announced

Coca-Cola's North American volume was flat last quarter, so all of its 5% global volume growth came from overseas, where each drink brings in less revenue.

Summary

Coca-Cola owns the brands and sells concentrate to bottlers, which make and deliver the drinks around the world. Growth now comes mostly from selling more drinks: volume rose 5% last quarter while price and mix added 1%. North America volume was flat, so overseas markets carried the gain. The stock depends on volume keeping up without the World Cup and North America recovering.

$94.80

+$26.36 (+38.52%)Past year

What Coca-Cola does

Coca-Cola owns the brands and sells the flavor concentrate. Independent bottlers mix, package and deliver the drinks, so Coca-Cola avoids most factory and truck costs and keeps a large share of revenue as profit.²¹

What it sells

Concentrate and syrup59% of revenue, FY2025
Flavor base sold to bottlers, priced as a share of what they charge stores, so higher shelf prices raise Coca-Cola's revenue too.
Finished drinks41% of revenue, FY2025
Drinks Coca-Cola makes and sells itself, including U.S. restaurant fountain syrup and company-owned bottlers. More revenue per case, lower margins.

Who buys it

Mostly bottlers. The five largest, including Coca-Cola FEMSA, Coca-Cola Europacific Partners and Coca-Cola HBC, handle 44% of volume, and one bottler alone was 10% of 2025 revenue. The U.S. is 40% of revenue but only 16% of volume.

Where you've seen it

The truck delivering Coke to a store usually belongs to an independent bottler, not The Coca-Cola Company.

How it got this way

An accident of history. In 1899, when soda fountains were Coca-Cola's business, owner Asa Candler gave two Chattanooga lawyers the exclusive right to bottle Coke across nearly all of the U.S. Rather than build every plant themselves, they signed up local owners to bottle in set territories. Within 20 years there were over 1,000 plants, 95% locally owned. Coca-Cola kept the recipe and the brand; bottlers took on the plants and trucks.²²

The backstory

In 2025 Coca-Cola grew by raising prices while the number of drinks it sold stayed flat. In 2026 it is pushing volume instead, and price and mix added only 1% in the third quarter. Cheaper options in Asia Pacific and faster growth in lower-priced markets pull the average down. The World Cup campaign gave the volume push an extra lift.

How the business makes money

Why Coca-Cola keeps so much of every sale^{1,2,4,8,10,20,23}

Step 1
Ads, like this year's World Cup campaign, make people around the world want Coke.
Step 2
Bottlers buy the flavor base from Coca-Cola and do the costly work: plants, trucks and getting drinks into stores.
Step 3
With few factories or trucks of its own, Coca-Cola keeps about 31¢ of every $1 of sales after running the business.
What shareholders get
Much of that comes back to shareholders as a dividend, raised 64 years in a row.

Advantages

A worldwide bottling system it doesn't pay for

Major advantage

Coca-Cola's biggest advantage. Bottlers sell its drinks in more than 200 countries and carry most factory and truck costs, keeping its margins high. It gained value share in every region in 2025.^1,4

Marketing scale

Strong advantage

A strong lever. The World Cup campaign drew more than 9 billion online views, and management says it drove part of trademark Coca-Cola's volume rise.^1,2

Pricing for every budget

Supporting

Useful and flexible. Coca-Cola can grow through price, as it did in 2025, or through cheaper sizes that add new buyers, as it is doing in Asia this year.^1,2,4

What's changing

Coca-Cola is shifting from price-led to volume-led growth under a new CEO

A new CEO is continuing a shift that began before him. Henrique Braun, chief operating officer since 2025, replaced James Quincey on March 31, 2026, and the third quarter was his second full one in charge. Coca-Cola kept Costa Coffee after bids reportedly came in low, and expects its Africa bottling sale to close in the fourth quarter of 2026.^{1,2,5,8,9,10,11,23}

Competitors

Who else an investor would consider, and how they compare.

Company	Market value	What it does	Compared with Coca-Cola
Coca-Colathis stock	$407.73B	Coca-Cola owns the brands and sells the flavor concentrate. Independent bottlers mix, package and deliver the drinks, so Coca-Cola avoids most factory and truck costs and keeps a large share of revenue as profit.
PepsiCoPEP	$184.62B	Sells snacks like Lay's and Doritos alongside Pepsi and Gatorade drinks.	Pepsi leans on snacks; Coca-Cola is all drinks and is winning there.¹²
Keurig Dr PepperKDP	$47.62B	Owns Dr Pepper and Keurig coffee machines; plans to split after buying JDE Peet's.	Keurig Dr Pepper is part coffee company; Coca-Cola is a much larger soda business.^13,14
Monster BeverageMNST	$90.99B	Sells Monster energy drinks, distributed worldwide through Coca-Cola's bottlers.	Monster grows faster in energy drinks; Coca-Cola owns a stake and distributes them.^15,4

Leadership

Who runs the company, and how the stock has done under the CEO.

KO +26.2%S&P 500 +16.6%Total return with dividends since Mar 2026

Henrique BraunCEO7 mo

John MurphyPresident and CFO4 yrs, since 2022

James QuinceyExecutive Chairman7 mo

When Braun was named (Dec 2025), the stock moved -1.6% that day; the S&P 500 moved +0.2%.

Wall Street on Braun: PositiveTD Cowen raised its price target to $100 and called Coca-Cola its top pick among consumer goods makers. Bernstein started covering it at Hold, citing risk to its Latin America business from a new tax Mexico plans for 2026.^L5,L6,L7

Leadership sources (7) · researched Oct 2026

L1The Coca-Cola Company Announces CEO Succession Plan; Chief Operating Officer Henrique Braun to Succeed James Quincey as CEO in 2026 · The Coca-Cola Company / Business Wire, 2025-12-10
L2Coca-Cola names a company veteran as its new CEO · Associated Press / Yahoo Finance, 2025-12-11
L3Coca-Cola Names John Murphy as Incoming President and CFO · ProFood World, 2022-07-21
L4The Coca-Cola Company Announces Leadership Transition for North America Operating Unit · The Coca-Cola Company, 2026-06-25
L5Coca-Cola Reports Second Quarter 2026 Results and Raises Full Year Guidance · The Coca-Cola Company / Nasdaq, 2026-07-28
L6TD Cowen raises Coca-Cola stock price target on strong Q2 results · Investing.com, 2026-07-29
L7Coca Cola (KO) Stock Sees Fair Value Lift After Q2 Beat And Higher Guidance · Simply Wall St / Yahoo Finance, 2026-08-04

Bull vs. bear: two bets on the same stock

1
A share is a small slice of the company. Its value comes from the profits the company will make in the future.
2
Nobody knows those profits yet. Buyers (bulls) pay today's price betting they'll beat what most people expect. Sellers (bears) bet they'll fall short.
3
When results come in, the price moves toward whichever side was right, and that side makes money.

The question they disagree on

Can Coca-Cola grow organic revenue 5% or more in 2027 with price and mix adding only about 1%, leaving volume to supply most of the growth?^{1,2,4,5,6,17,23,24,25,26}

Bull case: why buyers buy

People keep buying more Coke Zero, water and sports drinks worldwide, so volume carries growth and earnings rise 7% to 8% a year without leaning on price.

Coca-Cola's own brand is still growing. Management said trademark Coca-Cola, fairlife, Powerade and smartwater posted strong North America volume growth in the third quarter.
Zero Sugar is booming. Coke Zero volume rose about 16% last quarter, and Coca-Cola gained value share in total nonalcoholic ready-to-drink beverages.
Management raised its 2026 forecast again. It now expects at least 5% organic revenue growth and earnings per share up at least 11%.
Coca-Cola reliably beats forecasts. It topped earnings estimates again in the third quarter, as in each of the previous four.

Bear case: why sellers sell

If the World Cup lift fades and stretched consumers cut back, volume slows, price cannot fill the gap, and a stock above its usual valuation falls back.

Growth rests almost entirely on volume. Price and mix added only 1% last quarter, because 4 points of price increases were offset by 3 points of weaker mix.
North America stalled. Volume was flat, and management expects consumers to keep favoring value across markets and income groups into 2027.
The fastest growth is in lower-priced markets. Asia Pacific price and mix fell 2% in the quarter (down 6% over nine months), even as it gained value share.
A tax case could cost billions. If Coca-Cola loses its appeal, it could owe about $14 billion beyond what it has already paid, and the sum keeps growing.

Where Delphi landssellWe think the bear case is more likely than today's price assumes.See why

What to watch

The numbers that will settle the debate.

Unit case volume■ flat

Up 5% in the third quarter, after 5% in the second and 3% in the first, with North America flat. 2025 was flat.^1,4,5,23

Counts drinks sold, so it shows whether growth comes from volume rather than price.

Price and mix▼ worsening

Up 1% in the third quarter, with North America up 1% and Asia Pacific down 2%.^1,4,23

Revenue per drink, which shows how much growth still comes from charging more. It was 4% in 2025.

Comparable operating margin▲ improving

32.9% in the third quarter, up from 31.9% a year earlier.²³

Shows whether extra volume turns into extra profit, not just extra sales.

Next earnings report

No date announced yet.

What to listen for: Whether North America volume turns positive and what management guides for 2027 organic revenue and earnings, including the Africa sale's roughly 8-point revenue drag.^23,26

What would prove this wrong

✕Global unit case volume falls back toward flat after the World Cup ends.
✕Management guides 2027 organic revenue growth below 4%.
✕The appeals court sides with the IRS, putting about $20 billion at stake.
✕Price cuts spread beyond Asia Pacific and comparable operating margin starts falling.
✕North America volume stays flat through 2027 while overseas price and mix keep falling.

Our ratingSellLow convictionas of Nov 3 close, $94.80 · what ratings mean

Changed from Hold to Sell as the price moved to $94.80. At this price the expected total return is +7.9%, behind the S&P 500 by 10.6 points.

12-month target: $100.25 (+5.7%)
Plus dividend: +2.2%
S&P 500, same method, with dividends: +18.5%
Expected vs the market: -10.6 points

The math behind the recommendation

Three 12-month price scenarios, weighted by probability, compared with the S&P 500 under the same method.

Now $94.80

Target $100.25

bull case25% likely

$117.82 +24%

Overseas volume stays strong, North America recovers and margin keeps rising, putting 2028 earnings near the top of analysts' range.

$3.75 earnings per share × 31.4 = $117.82

base case55% likely

$97.81 +3%

Volume grows about 3% and price adds about 1% to 2%, so organic revenue grows near 5% and earnings rise about 7% a year.

$3.71 earnings per share × 26.4 = $97.81

bear case20% likely

$84.99 -10%

North America stays flat, value-seeking consumers cut back and price cannot fill the gap, leaving earnings near the low end of estimates.

$3.66 earnings per share × 23.2 = $84.99

Why these odds: Coca-Cola beat estimates again and raised its 2026 forecast a third time, but 2027 estimates are unchanged over 90 days at $3.52 and North America volume was flat. 2028 ($3.77) is extended from MarketScreener's growth rate.

How the prices are built: Wall Street expects earnings per share of $3.71 for the year starting a year from now (analysts range from $3.61 to $3.79). Today the stock trades at 27.3 times next year's earnings per share; its five-year middle is 23.5.^{23,27,28,29,26}

What tests the call: Fourth-quarter 2026 earnings and first 2027 guidance (Feb 10)

Buy means expected to beat the S&P 500 by 10+ points over 12 months; Sell means expected to trail it by 10+. Inputs gathered Oct 28; the recommendation updates with the price every day. Model-generated, not personalized investment advice. How ratings work · Track record

What the price assumes

At $94.80, investors pay 46% more than they pay for the average stock's earnings

Coca-Cola trades at 27 times the earnings analysts expect over the next 12 months. That ratio is the multiple: what investors pay today for each dollar of a year's earnings. That is pricier than it has been 80% of the time over the past five years, when the middle was 24.

Analysts expect earnings to grow about 7% the year after, against about 16% for the S&P 500. The S&P 500 trades at 19 times. Coca-Cola's earnings are expected to grow slower than the market's, so the premium has to rest on something other than growth, such as how dependable those earnings are.

Coca-Cola multiple: 27×
S&P 500 multiple: 19×
Base case: +3%
Bear case: −10%

The skewOur bear case loses about $3.26 for every $1 our base case makes. That ratio, how much you stand to lose against how much you stand to make, is the skew.

Last earnings

Q3 2026 results, reported Oct 27

Earnings and revenue beat estimates and Coca-Cola raised its profit and cash forecasts, but flat North America volume sent the stock lower.^23,24,25,26

Reported Oct 27	Expected	Actual	Difference
Earnings per share	$0.88	$0.91	+3.3%
Revenue	$12.92B	$13.40B	+3.7%

Stock reaction: -1.7% on the day, closing at $91.18 (from $92.71)

Why the stock moved

Down: North America volume was flat. Braun blamed July 4 timing and Topo Chico supply; reports said no quick fix.
Down: management expects consumers to keep favoring value, and said Sprite, BODYARMOR and North America supply need work.
Up: 2026 earnings growth forecast rose to at least 11% from 9-10%, and free cash flow to $13.0 billion.
Context: volume rose 5% versus roughly 3% expected, but the stock had already risen about 30% in 12 months (TipRanks).

What it means for the stock: Volume growth held, but it is an overseas story: North America stalled. The open questions are a North America recovery and 2027 guidance.