# Coca-Cola (KO) Sector: Beverages | Field | Value | |---|---| | Price | $96.03 | | Market cap | $413B | | Intrinsic value source | Analysts | | Data as of | 2026-11-10 | | Next earnings | 2027-02-09 (estimate) | Analysts: Bullish Picks: Research only Discount category: Far above intrinsic value ## In short Investors pay a premium for Coca-Cola's brands and steady growth, and organic growth near the 2026 pace with no large IRS tax bill can earn it over several years. ## Themes and gap - Themes: Weak consumer (weak-consumer), Regulation and courts (regulation-legal) - Gap type: Slow (slow) - Why: The Q4 2026 report with 2027 guidance in February 2027 tests growth, but the IRS appeal ruling has no set date and the premium depends on many years of steady growth. ## About The Coca-Cola Company makes and sells concentrates, syrups and finished beverages. Its brands include Coca-Cola, Sprite, Fanta, fairlife, smartwater, Powerade, Minute Maid and Costa. It sells most of its concentrate to independent bottling partners, which make, package and distribute the drinks. It also owns some bottling operations in its Bottling Investments segment, and it is selling several of them. Net revenues were $47.9 billion in 2025 and $13.4 billion in Q3 2026. Henrique Braun became CEO on March 31, 2026, and James Quincey became Executive Chairman. ## Thesis Coca-Cola trades at a premium because investors pay for brands that grow almost every year in good and bad economies. Organic revenue grew 5% in 2025, and the company now guides at least 5% organic revenue growth and at least 11% comparable EPS growth for 2026. Unit case volume grew 5% in each of Q2 and Q3 2026, and the company gained value share in each quarter. The price assumes that this growth continues for many years and that the IRS tax case does not take a large part of the cash. For the premium to be earned, three things must be true. Organic revenue must keep growing about 5% or more a year after the sales of bottling operations in Africa and Asia, which lower reported revenue. The comparable operating margin must stay near the 32.9% of Q3 2026. The U.S. Court of Appeals for the Eleventh Circuit, which heard the IRS case on June 25, 2026, must rule mostly for the company, or the company can owe about $14 billion more in tax and interest for 2010 to 2025. The Q4 2026 report with the 2027 guidance, expected in February 2027, gives the next test. The court ruling has no set date. The premium can shrink if volume growth slows, if currency turns against the company, or if the company loses the tax case. ## Checkpoints - Q4 2026 (estimate): Sale of bottling operations in Africa. Status: Pending. Watch: A close of the sale to Coca-Cola HBC by the end of 2026, as the company expects, passes; a delay into 2027 or a lower price fails. - Feb 9, 2027 (estimate): Q4 2026 results and 2027 guidance. Status: Pending. Watch: 2027 guidance for organic revenue growth near 5% or more and comparable EPS growth above the divestiture and currency headwinds passes; lower organic growth guidance or a lower margin fails. - 2027 (estimate): Eleventh Circuit ruling on the IRS tax case. Status: Pending. Watch: A ruling mostly for the company passes; a ruling for the IRS, which can add about $14 billion of tax and interest, fails. ## Balance sheet - Cash: $16.6B - Debt: $41.6B - Net debt: $25.0B - Interest cover: 12× - Undrawn credit line: $6.6B - Debt due within 12 months: $5.0B Coca-Cola funds itself mainly with long-term notes in U.S. dollars and euros, and it uses commercial paper for short-term needs. At October 2, 2026, debt was $41.6 billion: $36.6 billion of long-term debt, $4.9 billion of current maturities and $73 million of loans and notes payable. It had no commercial paper, down from $1.5 billion at the end of 2025. Cash, cash equivalents, short-term investments and marketable securities were $16.6 billion. Unused backup lines of credit were $6.6 billion, and they end at different dates through 2031. Interest cover is operating income divided by interest expense for the first nine months of 2026. In the same nine months, operating cash flow was $12.5 billion, free cash flow was $11.4 billion, dividends were $6.8 billion and share purchases were $900 million. Other noncurrent assets include the $6.0 billion that the company paid to the IRS in 2024 and $589 million of interest on it. The company loses this amount and can owe about $14 billion more if it loses the tax case. The sale of bottling operations in Africa to Coca-Cola HBC is expected to close by the end of 2026. As of 2026-10-02. Sources: - https://www.sec.gov/Archives/edgar/data/21344/000162828026067403/a2026q3earningsreleaseex-9.htm - https://www.sec.gov/Archives/edgar/data/21344/000162828026067844/ko-20261002.htm ## Dividends - Dividend yield: 2.2% (last 12 months, at the current price) - Paid per share, last 12 months: $2.10 (4 payments) - Current annual rate: $2.12 ($0.53 x 4 a year) - Payout ratio: 67% of the earnings of the last fiscal year (the year ended 2025-12-31) - Latest ex-dividend date: 2026-09-15, $0.53 per share - Growth over the last 5 years: 4.7% a year - Growth over the last 10 years: 4.3% a year Dividends per share by year: 2016: $1.40, 2017: $1.48, 2018: $1.56, 2019: $1.60, 2020: $1.64, 2021: $1.68, 2022: $1.76, 2023: $1.84, 2024: $1.94, 2025: $2.04. Source: company filings and market data, read on 2026-11-09. ## Recent events - 2026-10-28: In its Q3 2026 Form 10-Q, Coca-Cola said that its bottling operations in Singapore, Malaysia and Myanmar are now held for sale. It expects these sales to close by mid-2027, after regulatory approvals. - 2026-10-27: Coca-Cola reported Q3 2026 results. Net revenues grew 7% to $13.4 billion, organic revenues grew 7% and unit case volume grew 5%. Comparable EPS grew 11% to $0.91. It raised its 2026 guidance to at least 5% organic revenue growth, at least 11% comparable EPS growth and at least $13.0 billion of free cash flow. For 2027, it expects a headwind from acquisitions and divestitures of about 8% to comparable net revenues and about 2% to comparable EPS. - 2026-07-28: Coca-Cola reported Q2 2026 results. Net revenues grew 7% to $13.4 billion, organic revenues grew 6% and unit case volume grew 5%. Comparable EPS grew 11% to $0.97. It raised its 2026 guidance for comparable EPS growth to 9% to 10% and for free cash flow to about $12.4 billion. - 2026-07-16: Coca-Cola said in an 8-K that fairlife, its dairy company, had a ransomware event. Production of fairlife in the United States stopped for a time, and production in Canada was not affected. The company said that product quality and safety were not affected. - 2026-06-25: The U.S. Court of Appeals for the Eleventh Circuit heard Coca-Cola's appeal of the Tax Court decision in its transfer pricing case with the IRS. Coca-Cola paid $6.0 billion for the tax years 2007 to 2009 in 2024, and it estimates about $14 billion of more tax and interest for 2010 to 2025 if it loses. - 2026-06-25: Coca-Cola said that Jennifer Mann, President of the North America Operating Unit, will leave her role on July 31, 2026. John Murphy, President and Chief Financial Officer, took over North America on an interim basis on August 1, 2026. - 2026-04-28: Coca-Cola reported Q1 2026 results. Net revenues grew 12% to $12.5 billion and organic revenues grew 10%, helped by six more days in the quarter. Unit case volume grew 3%, and comparable EPS grew 18% to $0.86. - 2026-03-31: Henrique Braun, the Chief Operating Officer, became CEO of Coca-Cola. James Quincey, the former CEO, became Executive Chairman. The board elected Mr. Braun on December 10, 2025. - 2026-02-10: Coca-Cola reported 2025 results. Net revenues grew 2% to $47.9 billion, organic revenues grew 5% and comparable EPS grew 4% to $3.00. Q4 2025 included a non-cash impairment charge of $960 million on the BODYARMOR trademark. Free cash flow was $11.4 billion without the fairlife milestone payment. ## Latest news and filings - Last earnings: 2026-10-27 (8-K: https://www.sec.gov/Archives/edgar/data/21344/000162828026067403/) - Next earnings: 2027-02-09 (expected; the company has not confirmed it) | Filed | Form | Headline | Period end | XBRL document | Link | | --- | --- | --- | --- | --- | --- | | 2026-10-28 | 10-Q | Quarterly report for the period ended Oct 2, 2026 | 2026-10-02 | ko-20261002 | https://www.sec.gov/Archives/edgar/data/21344/000162828026067844/ko-20261002.htm | | 2026-10-27 | 8-K | Earnings release | | ko-20261027 | https://www.sec.gov/Archives/edgar/data/21344/000162828026067403/ko-20261027.htm | | 2026-07-29 | 10-Q | Quarterly report for the period ended Jul 3, 2026 | 2026-07-03 | ko-20260703 | https://www.sec.gov/Archives/edgar/data/21344/000162828026050503/ko-20260703.htm | | 2026-07-28 | 8-K | Earnings release | | ko-20260728 | https://www.sec.gov/Archives/edgar/data/21344/000162828026049922/ko-20260728.htm | | 2026-07-16 | 8-K | Other company news | | ko-20260716 | https://www.sec.gov/Archives/edgar/data/21344/000162828026048466/ko-20260716.htm | | 2026-06-25 | 8-K | Change of directors or officers | | | https://www.sec.gov/Archives/edgar/data/21344/000155278126000366/e26287_ko-8k.htm | | 2026-05-01 | 8-K | Shareholder vote results | | ko-20260429 | https://www.sec.gov/Archives/edgar/data/21344/000162828026029230/ko-20260429.htm | | 2026-04-30 | 10-Q | Quarterly report for the period ended Apr 3, 2026 | 2026-04-03 | ko-20260403 | https://www.sec.gov/Archives/edgar/data/21344/000162828026028802/ko-20260403.htm | | 2026-04-28 | 8-K | Earnings release | | ko-20260428 | https://www.sec.gov/Archives/edgar/data/21344/000162828026027723/ko-20260428.htm | | 2026-02-20 | 8-K | Change of directors or officers | | ko-20260219 | https://www.sec.gov/Archives/edgar/data/21344/000162828026010052/ko-20260219.htm | Every filing on SEC EDGAR (CIK 21344): https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000021344&type=&dateb=&owner=include&count=40 ## Risks - Medium: Coca-Cola can lose its tax case with the IRS. It would then not get back the $6.0 billion it paid in 2024 and $589 million of interest on it, it can owe about $14 billion more for 2010 to 2025, and its effective tax rate can rise by about 3.8 points. The company believes that it will more likely than not win on appeal. - Medium: The price assumes many years of steady growth. Health rules, sugar taxes and changes in what people drink can slow volume growth. North America unit case volume was even in Q3 2026. - Medium: About two thirds of the business is outside the United States. Currency helped comparable EPS by about 3% in 2026, but the company expects a slight currency headwind in 2027. - Low: Coca-Cola is selling bottling operations in Africa and Asia. These sales lower reported revenue, by about 8% in 2027, and they can be delayed by regulators. - Low: A new CEO took over on March 31, 2026, and the head of North America left in July 2026. The fairlife ransomware event of July 2026 shows that cyber attacks can stop production. ## Links - Page: https://picks.utilarium.app/company/KO/ - History of changes: https://picks.utilarium.app/company/KO/history/ - JSON with full history: https://picks.utilarium.app/data/company/KO.json > Picks is a personal record of stock picks. It gives general opinions about stocks, including a "Top pick" label. They are not tailored to your needs, goals or risk tolerance. Kevin is not a registered adviser and relies on the general-advice exemption in Canadian securities law (NI 31-103 s.8.25). Do your own research, or ask a registered adviser. Kevin may hold any stock on this site. Prices, intrinsic values and ratings can be delayed or wrong; check the original source. Full disclaimer: /disclaimer/.