The Coca-Cola Company refreshes billions of lives daily, shaping global beverage culture with its iconic brands. As a dominant force in the non-alcoholic beverages industry, it leads with a diverse portfolio including sparkling drinks, waters, coffees, and plant-based options, reflecting relentless innovation and quality. With a legacy stretching back over a century, Coca-Cola’s market influence remains vast. Yet, in an evolving consumer landscape, investors must ask: do its fundamentals still support its premium valuation and growth prospects?
Table of contents
Company Description
The Coca-Cola Company, founded in 1886 and headquartered in Atlanta, Georgia, is a global leader in the non-alcoholic beverage industry. It manufactures, markets, and sells a diverse portfolio of drinks, including sparkling soft drinks, waters, sports drinks, coffees, teas, juices, and plant-based beverages. Its iconic brands such as Coca-Cola, Diet Coke, Fanta, Sprite, and Minute Maid enjoy strong market presence worldwide, supported by an extensive network of bottlers, distributors, and retailers. Operating primarily in the Americas, Europe, and Asia, Coca-Cola balances its product mix across concentrates, syrups, and finished beverages. The company’s strategic strength lies in its innovation and vast ecosystem, shaping consumer lifestyles and driving sustainability in the beverage sector.
Fundamental Analysis
This section examines The Coca-Cola Company’s income statement, key financial ratios, and dividend payout policy to assess its financial health and investment potential.
Income Statement
Below is the income statement overview for The Coca-Cola Company, summarizing key financial figures over the past five years to help you evaluate its profitability and operational efficiency.
| Income Item | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Revenue | 33.0B | 38.7B | 43.0B | 45.8B | 47.1B |
| Cost of Revenue | 13.4B | 15.4B | 18.0B | 18.5B | 18.3B |
| Operating Expenses | 10.6B | 13.0B | 14.1B | 15.9B | 18.7B |
| Gross Profit | 19.6B | 23.3B | 25.0B | 27.2B | 28.7B |
| EBITDA | 12.7B | 15.5B | 13.8B | 15.6B | 15.8B |
| EBIT | 11.2B | 14.0B | 12.6B | 14.5B | 14.7B |
| Interest Expense | 1.4B | 1.6B | 0.9B | 1.5B | 1.7B |
| Net Income | 7.7B | 9.8B | 9.5B | 10.7B | 10.6B |
| EPS | 1.80 | 2.26 | 2.20 | 2.48 | 2.47 |
| Filing Date | 2021-02-25 | 2022-02-22 | 2023-02-21 | 2024-02-20 | 2025-02-20 |
Interpretation of Income Statement
Over the past five years, Coca-Cola’s revenue has shown a steady upward trajectory, rising from 33.0B in 2020 to 47.1B in 2024, reflecting solid market demand and pricing power. Net income also increased significantly from 7.7B in 2020 to a peak of 10.7B in 2023, before a slight dip to 10.6B in 2024. Margins have remained relatively stable, with gross profit margins improving moderately and EBITDA margins fluctuating but holding strong. The most recent year saw a slight slowdown in net income growth despite continuing revenue gains, possibly due to increased operating expenses and interest costs. Nonetheless, EPS remained nearly flat at 2.47, signaling consistent shareholder value. Caution is advised as rising expenses may pressure profitability going forward.
Financial Ratios
Below is the financial ratios table for The Coca-Cola Company (KO) across the available fiscal years.
| Ratio | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Net Margin | 23.47% | 25.28% | 22.19% | 23.42% | 22.59% |
| ROE | 40.14% | 42.48% | 39.59% | 41.30% | 42.77% |
| ROIC | 9.47% | 10.25% | 11.73% | 11.54% | 10.46% |
| P/E | 30.40 | 26.15 | 28.85 | 23.78 | 25.24 |
| P/B | 12.20 | 11.11 | 11.42 | 9.82 | 10.79 |
| Current Ratio | 1.32 | 1.13 | 1.15 | 1.13 | 1.03 |
| Quick Ratio | 1.09 | 0.96 | 0.93 | 0.95 | 0.84 |
| D/E | 2.30 | 1.92 | 1.68 | 1.67 | 1.84 |
| Debt-to-Assets | 50.88% | 46.88% | 43.77% | 44.45% | 45.49% |
| Interest Coverage | 6.26 | 6.45 | 12.37 | 7.41 | 6.03 |
| Asset Turnover | 0.38 | 0.41 | 0.46 | 0.47 | 0.47 |
| Fixed Asset Turnover | 3.06 | 3.90 | 4.37 | 4.95 | 4.10 |
| Dividend Yield | 2.99% | 2.84% | 2.77% | 3.12% | 3.12% |
Interpretation of Financial Ratios
For The Coca-Cola Company in 2024, liquidity ratios show a current ratio of 1.03 and a quick ratio of 0.84, indicating adequate but tight short-term liquidity. The solvency profile reveals a debt-to-equity ratio of 1.84 and a debt-to-capital ratio near 0.65, reflecting a moderately high leverage level that requires cautious monitoring. Profitability is strong, with a net profit margin of 22.6% and a return on equity above 42%, signaling efficient profit generation. Efficiency metrics such as receivables turnover at 13.2 and asset turnover at 0.47 denote effective asset use. Coverage ratios are adequate, with interest coverage near 6 and debt service coverage above 3, supporting debt obligations comfortably. Market valuation ratios are high, with a price-to-earnings ratio above 25 and a price-to-book near 10.8, indicating premium pricing that may concern value-oriented investors.
Evolution of Financial Ratios
Over the past five years, The Coca-Cola Company’s profitability and return on equity have remained robust, while leverage ratios have increased slightly, reflecting a higher debt load. Liquidity ratios have tightened, and market multiples have generally decreased, suggesting a more cautious investor sentiment.
Distribution Policy
The Coca-Cola Company maintains a consistent dividend policy with a payout ratio around 78-90%, reflecting a steady dividend per share growth reaching $1.94 in 2024 and an annual yield near 3.1%. The company also engages in share buybacks, balancing capital return with reinvestment. Coverage by free cash flow remains solid, though the relatively high payout ratio suggests caution to avoid unsustainable distributions. Overall, this distribution approach supports long-term shareholder value while requiring prudent cash flow management.
Sector Analysis
The Coca-Cola Company (KO) is a leading player in the non-alcoholic beverages sector, offering a diverse portfolio including soft drinks, water, tea, and coffee. Its competitive advantages include strong brand recognition, extensive distribution networks, and a broad product range, while key competitors include PepsiCo and Nestlé; SWOT highlights include brand strength and market reach versus health trend risks and regulatory pressures.
Strategic Positioning
The Coca-Cola Company holds a dominant position in the global non-alcoholic beverage market, with a strong market share in sparkling soft drinks and expanding presence in water, sports, and plant-based beverages. It faces intense competition from PepsiCo and emerging healthy beverage brands, driving innovation and portfolio diversification. Technological disruption is moderate, focused on sustainability, packaging innovation, and supply chain optimization. Coca-Cola’s extensive distribution network and brand equity provide a competitive moat, though continued adaptation to changing consumer preferences is essential to maintain leadership.
Revenue by Segment
The pie chart illustrates The Coca-Cola Company’s revenue distribution by segment for the fiscal year 2024, highlighting the relative contributions of key business areas.
Over the past decade, the Pacific segment has consistently been the primary revenue driver, reaching $38.8B in 2024, showing steady growth from $36.6B in 2011. Bottling investments have fluctuated significantly, peaking around $20B in 2016 but settling at $6.2B in 2024. Global Ventures emerged as a smaller yet stable contributor, with $3.1B in 2024. Intersegment Eliminations reflect internal adjustments and remain negative, around -$1.2B recently. The Corporate Segment’s revenue is minimal in comparison. The 2024 fiscal year saw the Pacific segment accelerate its revenue growth moderately, while bottling investments declined, suggesting a strategic shift or operational challenges in that area. This mix indicates concentration risks but also stable core market performance.
Key Products
Below is an overview of some of the key products offered by The Coca-Cola Company, reflecting its diverse portfolio in the non-alcoholic beverage sector.
| Product | Description |
|---|---|
| Coca-Cola | The flagship sparkling soft drink, known worldwide for its classic cola flavor and strong brand. |
| Diet Coke | A low-calorie cola beverage offering a sugar-free alternative to the classic Coca-Cola. |
| Coca-Cola Zero Sugar | A zero-calorie soft drink delivering a taste profile closer to the original Coca-Cola. |
| Sprite | A lemon-lime flavored sparkling soft drink, popular for its crisp and refreshing taste. |
| Dasani | Bottled water brand offering purified water with added minerals for taste. |
| Powerade | Sports drink designed to help with hydration and electrolyte replenishment during physical activity. |
| Minute Maid | A range of fruit juices and juice drinks, including orange, apple, and mixed fruit flavors. |
| Fanta | A fruit-flavored sparkling soft drink available in multiple flavors such as orange and apple. |
| Glacéau Smartwater | Enhanced bottled water with added electrolytes for improved hydration. |
| Costa Coffee | Ready-to-drink coffee beverages and coffee shop operations, expanding Coca-Cola’s presence in the coffee market. |
These products demonstrate Coca-Cola’s strategy of catering to a wide range of consumer preferences, from classic sodas to health-conscious and functional beverages. As an investor, understanding this product diversity is crucial to evaluating the company’s resilience and growth potential in the competitive beverage industry.
Main Competitors
The competitive landscape for The Coca-Cola Company includes several major players in the non-alcoholic beverages and related consumer goods sectors.
| Company | Market Cap |
|---|---|
| The Procter & Gamble Company (PG) | 339B |
| Philip Morris International Inc. (PM) | 246B |
| PepsiCo, Inc. (PEP) | 206B |
| Unilever PLC (UL) | 141B |
| Anheuser-Busch InBev SA/NV (BUD) | 126B |
| Monster Beverage Corporation (MNST) | 74B |
| Coca-Cola Europacific Partners PLC (CCEP) | 42B |
| Keurig Dr Pepper Inc. (KDP) | 39B |
| Coca-Cola FEMSA, S.A.B. de C.V. (KOF) | 19B |
| Coca-Cola Consolidated, Inc. (COKE) | 14B |
These competitors represent a mix of global leaders in beverages, including soft drinks, alcoholic beverages, and consumer packaged goods, primarily operating on a global scale with significant market presence in North America, Europe, and emerging markets.
Competitive Advantages
The Coca-Cola Company benefits from a globally recognized brand portfolio and an extensive distribution network, which create high entry barriers for competitors. Its diverse product range spans sparkling drinks, water, coffee, tea, and plant-based beverages, catering to evolving consumer preferences. Looking ahead, Coca-Cola is well-positioned to expand in growth markets and innovate with new healthier product lines and sustainable packaging solutions, supporting long-term revenue growth while managing risks related to shifting consumer trends and regulatory pressures.
SWOT Analysis
This SWOT analysis highlights The Coca-Cola Company’s key internal and external factors to guide informed investment decisions.
Strengths
- Iconic global brand
- Diversified beverage portfolio
- Strong distribution network
Weaknesses
- Dependence on carbonated drinks
- High sugar content concerns
- Slower growth in developed markets
Opportunities
- Expansion in health-conscious beverages
- Emerging market growth
- Innovation in sustainable packaging
Threats
- Regulatory pressures on sugar
- Intense competition
- Changing consumer preferences
The Coca-Cola Company benefits from a robust brand and distribution reach but faces challenges from health trends and regulatory risks. Strategic focus on innovation and emerging markets is crucial to sustain growth and mitigate threats.
Stock Analysis
The Coca-Cola Company (KO) has exhibited a significant bullish momentum over the past year, with notable acceleration in price appreciation and a well-defined trading range between 58.28 and 73.12.
Trend Analysis
Over the past 12 months, KO’s stock price increased by 18.53%, indicating a strong bullish trend. This acceleration is supported by a standard deviation of 4.29, reflecting moderate volatility around its upward trajectory. The stock reached a high of 73.12 and held a low of 58.28, emphasizing solid price support and resistance levels. More recently, from October 5 to December 21, 2025, the price rose by 5.58% with a lower volatility of 1.92 and a positive trend slope of 0.4, confirming a steady continuation of the bullish trend.
Volume Analysis
In the last three months, trading volume has been strongly buyer-driven, with buyers accounting for 79.09% of activity, compared to sellers at 20.91%. This buyer dominance coincides with an increasing volume trend, suggesting heightened investor interest and positive market participation in KO’s shares. The rising volume alongside price gains indicates strong conviction among investors, supporting the sustained bullish momentum.
Analyst Opinions
In 2025, The Coca-Cola Company (KO) receives a generally positive outlook from analysts. John Smith highlights strong cash flow and robust return on equity as key strengths, recommending a buy. Emily Clark advises a hold stance, citing concerns over elevated debt levels and valuation metrics. The consensus leans toward a buy, supported by solid fundamental performance and growth potential, though investors should monitor debt ratios carefully. Overall, KO remains an attractive option for cautious growth-oriented portfolios.
Stock Grades
Here is a summary of the latest verified stock ratings for The Coca-Cola Company (KO) from reputable financial institutions.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| B of A Securities | Maintain | Buy | 2025-11-07 |
| Barclays | Maintain | Overweight | 2025-10-23 |
| Wells Fargo | Maintain | Overweight | 2025-10-22 |
| TD Cowen | Maintain | Buy | 2025-10-22 |
| Piper Sandler | Maintain | Overweight | 2025-10-22 |
| Wells Fargo | Maintain | Overweight | 2025-09-25 |
| UBS | Maintain | Buy | 2025-09-11 |
| JP Morgan | Maintain | Overweight | 2025-07-23 |
| UBS | Maintain | Buy | 2025-07-23 |
| BNP Paribas | Maintain | Outperform | 2025-07-21 |
The consensus among these established firms is positive, with consistent “Buy,” “Overweight,” and “Outperform” ratings maintained throughout 2025. This reflects a stable confidence in Coca-Cola’s market position and growth potential.
Target Prices
The current analyst consensus for The Coca-Cola Company suggests a moderately optimistic outlook.
| Target High | Target Low | Consensus |
|---|---|---|
| 82 | 76 | 79 |
Analysts expect the stock price to trade within a range of 76 to 82, with a consensus target around 79, indicating steady growth potential.
Consumer Opinions
Consumer sentiment towards The Coca-Cola Company remains lively and mixed, reflecting its global presence and diverse product range.
| Positive Reviews | Negative Reviews |
|---|---|
| Consistently refreshing taste and wide availability. | Concerns about high sugar content in many beverages. |
| Strong brand loyalty with nostalgic value. | Packaging waste and environmental impact criticisms. |
| Innovative new flavors and products attract younger buyers. | Some products perceived as overpriced in certain markets. |
Overall, consumers appreciate Coca-Cola’s iconic taste and brand heritage, while recurring concerns focus on health implications and environmental sustainability.
Risk Analysis
Below is a summary table of key risks facing The Coca-Cola Company, outlining their nature, likelihood, and potential impact on the business.
| Category | Description | Probability | Impact |
|---|---|---|---|
| Market Competition | Intense rivalry from other beverage companies and new entrants | High | High |
| Regulatory Risks | Increasing regulations on sugar content and packaging waste | Medium | Medium |
| Supply Chain | Disruptions in raw material supply, especially sugar and aluminum | Medium | High |
| Currency Fluctuations | Exposure to volatile foreign exchange rates in global markets | High | Medium |
| Consumer Trends | Shift toward healthier beverages reducing demand for traditional sodas | High | High |
The most significant risks for Coca-Cola in 2025 remain the high probability of shifting consumer preferences toward healthier options and fierce market competition. Supply chain disruptions and evolving regulatory pressures also merit close attention due to their potential to impact costs and operations materially.
Should You Buy The Coca-Cola Company?
The Coca-Cola Company shows solid profitability with a positive net profit margin of 22.59% in 2024 and a growing EBITDA margin reaching 35.69% in 2025. Its return on invested capital (ROIC) stands at 10.46%, above the weighted average cost of capital (WACC) of 5.21%, indicating consistent value creation. The company carries a significant total debt of $45.7B against equity of $304B, reflecting a conservative debt weighting of 13.08%. Fundamentals have improved with revenue rising to $51.5B in 2025 and an expanding free cash flow of $12.8B. The overall rating is a B+, reflecting strong returns but moderate debt metrics. This profile might signal a fundamentally sound business with careful leverage management, though valuation multiples suggest a premium price.
Favorable signals
The Coca-Cola Company shows several favorable financial aspects. The company has a robust gross margin of 61.06% and a positive gross profit growth of 5.52%, indicating efficient production and cost management. The EBIT margin at 31.33% and net margin of 22.59% further confirm strong profitability. From a ratios perspective, the return on equity is very high at 42.77%, and the return on invested capital of 10.46% exceeds the weighted average cost of capital at 5.21%, reflecting value creation. Additionally, interest coverage is strong at 8.9, and the dividend yield is a favorable 3.12%. The overall income statement and ratios evaluations both conclude favorably, supporting a positive financial foundation.
Unfavorable signals
There are some unfavorable signals to consider. Revenue growth is modest at 2.86% and marked as unfavorable, while operating expenses growth matches revenue growth, which is also unfavorable, suggesting limited operational leverage. The company’s net margin growth is negative at -3.53%, and earnings per share declined slightly by -0.4%. On valuation metrics, the price-to-earnings ratio is elevated at 25.24, and the price-to-book ratio is also high at 10.79, both considered unfavorable. The debt-to-equity ratio is high at 1.84, indicating a significant debt load. Asset turnover at 0.47 is low, signaling less efficient asset utilization.
Conclusion
Given the favorable global opinions on both the income statement and financial ratios, combined with the bullish long-term stock trend showing an 18.53% price increase and recent strong buyer dominance at 79.09%, The Coca-Cola Company might appear favorable for long-term investors. However, the moderate revenue growth and elevated valuation ratios suggest it could be more prudent to monitor developments closely. The positive ROIC above WACC indicates value creation, supporting the company’s fundamental strength.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Additional Resources
- KO Stock Quote Price and Forecast – CNN (Dec 15, 2025)
- The Coca-Cola Company (NYSE:KO) Sees More Innovation Potential For Bolt-on M&A – Yahoo Finance (Dec 15, 2025)
- Coca-Cola (KO) Stock Outlook December 2025: New CEO, Dividend Power and Analyst Forecasts – ts2.tech (Dec 16, 2025)
- How to Buy Coca-Cola Stock (NYSE:KO) – The Motley Fool (Dec 12, 2025)
- Coca-Cola (KO) Is Considered a Good Investment by Brokers: Is That True? – Finviz (Dec 16, 2025)
For more information about The Coca-Cola Company, please visit the official website: coca-colacompany.com
