Beverage giant Coca-Cola (KO) is voluntarily recalling more than 10,000 cans of its signature drink due to a potential plastic contamination.
The recall, initiated on March 6, was officially designated a Class II recall by the U.S. Food and Drug Administration (FDA) on March 24. The Class II designation means the product could cause temporary or reversible health effects. The designation also occurs when the probability of a serious adverse health event is remote but not negligible.
The recall affects 864 12-packs of Coca-Cola Original Taste soft drink cans distributed in the states of Illinois and Wisconsin. The beverage recall is a rare event for Coca-Cola and appears to be having a limited impact on KO stock, which was trading up 2% March 26.
High Standards
The FDA said the recall, which affects more than 10,000 cans of Coca-Cola, was initiated because the impacted product may have been contaminated with plastic. The FDA did not mention any injuries or illnesses associated with the recall.
The recalled beverages were bottled and distributed at a plant in Milwaukee, Wisconsin, according to the FDA. For its part, Coca-Cola said that “the cases are being withdrawn because they did not meet our high-quality standards. We are taking this voluntary action because nothing is more important to us than providing high-quality products to the people who drink our beverages.”
KO stock has risen 14% so far this year.
Is KO Stock a Buy?
The stock of Coca-Cola has a consensus Strong Buy rating among 19 Wall Street analysts. That rating is based on 18 Buy and one Hold recommendations issued in the last three months. The average KO price target of $75.56 implies 7.79% upside from current levels.
