Coca-Cola Company (NYSE: KO) has confirmed that it will release its Q4 2021 earnings report on Thursday, February 10, 2022, before the market open.
What to look for
The company has a strong presence in locations such as movie theatres, theme parks, and restaurants, implying its fate is associated with how safe people feel. With increased vaccinations, more people are visiting these places, and that has seen a rebound in Coca-Cola sales to pre-pandemic levels. However, when the company releases its earnings on February 10, 2022, investors will be keen on whether the surge of the omicron variant might have slowed recovery.
Earnings: Stockearning’s Estimated EPS for the fiscal Q4 2021 is expected to be $0.41 per share. In the same quarter a year ago, the company had earnings per share of $0.47. Coca-Cola produced an earnings surprise of 12.07% in Q3 2021 with an EPS of $0.65. Historical EPS Performance shows that in the past 12 quarters, the company has topped EPS estimates 28 times (80%), met 6 times (17%), and missed once (2%).
Revenue: The company expects revenue of $8.97 billion, representing YoY increases of 4.2%. In the last quarter, the company beat revenue estimates by reporting revenue of $10.04 billion compared to analysts' estimates of $9.75 billion.
Stock movement: KO shares have gained 12% since the company released its fourth-quarter earnings. Interestingly, KO shares have been UP 26 times out of the past 48 quarters. So, the historical price reaction suggests a 54% probability of the share price going UP once the company reports its fiscal Q4 2021 earnings. According to the Stockearning algorithm, the predicted first-day move is 2%, while the predicted move on the seventh day is 2%.
What analysts are saying
Guggenheim analyst Laurent Grandet upgraded KO from Hold to Buy and also raised the price target from $61 to $66. Grandet told investors in a research note that Coca-Cola is exiting the FY2021 transition year "stronger." According to the analyst, despite poor vaccination rates, Coca-Cola is witnessing good emerging markets, with on-premise sales returning faster than predicted. Furthermore, according to Grandet, the company's portfolio simplification should result in a "more focused and agile organization" with improved gross margins. Finally, according to the analyst, Coca-value Cola's is "compelling" at prevailing share prices, who forecasts yearly earnings growth of 12% through fiscal 2023.
JPMorgan analyst Andrea Texeira upgraded KO to Buy from Hold and raised his price target on the stock from $59 to $63. Coca-sales Cola's momentum will continue to grow until 2022, according to the analyst, "fueled by reopening and pricing." In a research note, the analyst told investors that Coke's profitability is less affected by cost pressures because of its asset-light approach and "high" brand value, which provides for low price elasticity. In addition, even with the danger of a poor outcome from the tax issue with the IRS, its valuation remains compelling, according to Texeira.
Recently Deutsche Bank analyst Steve Powers slashed the company’s price target from $60 to $59 but maintained a Buy rating on the stock. In comparison to the consensus, Power is less optimistic about revenue but significantly more optimistic about overall earnings. Following the delta variation rise in July, he predicts "more volatile" away-from-home and on-premise trends, as well as shipment scheduling considerations, will likely impact on concentration volumes and channel mix.
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