The Zhitong Finance App learned that Deutsche Bank analyst Steve Powers's team released a report reaffirming the “buy” rating of Coca Cola (KO.US) and raising the target price from $98 to $101, which corresponds to an upward margin of about 3%. Coca Cola closed at $92.7 on Monday, with a market capitalization of around $398.8 billion.
According to the research report, Coca Cola's three-quarter report has crossed a “high threshold.” Coca Cola's three-quarter report organic sales (organic sales) and EPS both exceeded market expectations, but the stock price closed down 1.6% on the same day. Investors were mainly concerned about three points: recent organic sales performance, EPS headwinds in FY2027, and relatively high valuations (about 26 times NTM EPS).
The company's management raised its FY2026 guidance to organic growth of at least 5% and EPS growth of at least 11%. However, the low-end growth rate of organic sales in the fourth quarter implied by the guidelines was weaker than market expectations, mainly reflecting the pace of delivery and the normalization of single-box sales momentum. Management emphasized that the slowdown in the fourth quarter was due in large part to calendar effects and possible bottlers leaving inventory — bottlers held high safety stocks at the beginning of the year due to geopolitical fluctuations and strong demand. Inventory normalization is expected in the fourth quarter (mainly in the Asia-Pacific region), and there are no structural changes in inventory management at the system level.
Deutsche Bank believes that the 2027 pressure can be digested and continues to be optimistic about system resilience. Deutsche Bank believes that the three-quarter report has further strengthened its positive judgment on Coca Cola's organic sales momentum, EPS growth, and free cash flow conversion rate/ROIC improvement, especially compared to its multinational consumer goods peers. Despite FY27 facing offline pressures such as cost inflation, exchange rates, CCBA (bottling business-related), and interest and tax burdens, Deutsche Bank still expects the company to deliver another year of steady results with healthy sales momentum, system pricing power, and cost reduction potential.
Deutsche Bank expects organic sales to grow by 5.2% in the 2027 fiscal year, corresponding to EPS of $3.60, compared to the previous value of $3.54.