Coca-Cola Q3 Results Top Estimates; Updates Guidance

Coca-Cola (KO) delivered better-than-expected Q3 2021 results as strategic transformation allowed the company to navigate a dynamic environment. Revenue and earnings came in above consensus estimates, with the company updating its full-year guidance to reflect ongoing business momentum. KO shares rose 1.93% to close at $55.52 on October 27.

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Coca-Cola is a U.S. beverage company that manufactures and sells various non-alcoholic beverages worldwide. Its product line consists of sparkling soft drinks, water, enhanced water, sports drinks, juice, dairy, and energy drinks.

Revenue came in at $10 billion, up 16% compared to the same quarter last year, and beat consensus estimates of $9.78 billion. While revenue growth was broad-based, it was stronger in markets where coronavirus-related uncertainty is fading. (See Top Smart Score Stocks on TipRanks)

Non-GAAP EPS was up 18% year-over-year to $0.65, exceeding consensus estimates of $0.58. Coca-Cola exited the quarter with $9.2 billion in cash flow from operations, up $3 billion compared to the same quarter last year.

Coca-Cola’s business environment is improving, based on the recovery in many markets, which has helped fuel an increase in global unit case volume. The total volume delivered in Q3 was ahead of 2019 levels.

For the full year, Coca-Cola expects organic revenue to grow by between 13% and 14%. The company is also projecting non-GAAP EPS growth of between 15% and 17% versus $1.95 in 2020. Non-GAAP free cash flow from operations is expected to be approximately $10.5 billion.

Yesterday, Goldman Sachs analyst Bonnie Herzog reiterated a Hold rating on the stock with a $55 price target, implying that shares are fully-valued at current levels. According to the analyst, Q3 results came in much better than expected, with the company delivering strong top and bottom-line performance.

Consensus among analysts is a Moderate Buy based on 3 Buys, and 2 Holds. The average Coca-Cola price target of $61 implies 9.87% upside potential to current levels.