Coca-Cola (NYSE: KO) recently published its Q4 earnings, surpassing market expectations for both revenue and earnings. The company reported revenue of $11.5 billion and adjusted earnings of $0.55 per share, exceeding the consensus estimates of $10.7 billion and $0.52, respectively. Stronger pricing helped drive results, and Coca-Cola’s 2025 outlook met market expectations. These positive factors contributed to KO stock gaining 5% after the results were announced. Separately, CROX reports earnings tomorrow. Will the stock pop on the news? See How Might Crocs Stock React To Upcoming Earnings?
Since the start of 2024, KO stock has risen 13%, underperforming the S&P 500’s 27% gain. A slowdown in volume growth has weighed on its stock price over the past year. However, if you’re looking for a steadier investment alternative, consider the High-Quality Portfolio, which has delivered over 91% returns since its inception.
How Did Coca-Cola Perform In Q4?
Coca-Cola’s revenue of $11.5 billion reflected a 6% year-over-year increase on a reported basis. However, on an organic basis, revenue grew by 14%, driven by a 9% increase in price/mix and a 5% rise in concentrate sales. By segment, organic sales increased by 17% in Europe, the Middle East, and Africa, 25% in Latin America, 15% in North America, 1% in Asia Pacific, and 3% in Global Ventures.
Despite recent challenges in volume growth, Q4 volume increased by 2%, marking a positive development. Additionally, Coca-Cola saw a 90 basis point year-over-year increase in its operating margin, reaching 24% for the quarter. With higher revenues and expanded margins, net earnings rose by 12% to $0.55 per share. Looking ahead, the company expects organic sales growth between 5% and 6%, supported by both higher volume and pricing. Coca-Cola also projects its bottom line to grow between 2% and 3%, in line with market expectations of a 2.5% year-over-year increase. Although there were concerns over potential impacts from metal import tariffs, Coca-Cola’s management reassured investors that packaging costs make up a small portion of expenses and that any tariff-related effects would be manageable.
What Does This Mean For KO Stock?
Following its earnings report, KO stock rose, reflecting the company’s solid Q4 performance and guidance that aligned with market expectations. While its performance over the past four years has been uneven, the stock has been less volatile compared to the S&P 500, delivering annual returns of 11% in 2021, 11% in 2022, -4% in 2023, and 9% in 2024.
The Trefis High-Quality Portfolio, which includes 30 stocks, has exhibited lower volatility and has outperformed the S&P 500 over the past four years. Why? Because its holdings generally offer higher returns with lower risk compared to the broader market, as seen in HQ Portfolio performance metrics.
Given uncertainties surrounding interest rate cuts and global trade tensions, will KO underperform the S&P 500 over the next 12 months, or is a strong rally ahead? While we are updating our Coca-Cola model with the latest data, we believe there is still room for growth. At approximately $68 per share, KO trades at 23 times trailing earnings of $2.88 per share, which is below its five-year average P/E ratio of 25x. With strong volume growth, improving margins, and limited impact from aluminum tariffs, KO stock appears to have upside potential. Despite its recent price appreciation, we believe Coca-Cola remains an attractive long-term investment. As an aside, see What’s Happening With McDonald’s Stock?
While Coca-Cola stock may have room to grow, see how Coca-Cola’s Peers compare on key metrics. You can explore more company comparisons across different industries at Peer Comparisons.
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