US beverage and food giant Coca-Cola released its latest earnings this week.
The earnings are released ahead of the opening bell on Tuesday, and this article discusses the outlook for Coca-Cola stock.
KO – Weekly Chart
The recent rally in Coca-Cola has lost its fizz, and the weekly chart has a bearish tone. If the earnings are disappointing, traders could play the downside toward the $54 level.
KO is expected to show revenue growth when it reports fourth-quarter 2022 figures this week. The analyst estimate for the company’s fourth-quarter revenues is currently $10.01 billion, which would suggest 5.7% growth from the previous-year quarter’s reported figure.
For fourth-quarter earnings, the consensus is seeing 45 cents, which would mean flat results from the previous year.
Over the last few quarters, Coca-Cola’s performance has benefited from strategic transformation and an ongoing recovery worldwide. The company’s fourth-quarter performance is expected to see revenue growth across its operating segments, aided by an improved price/mix and increased concentrate sales. The company struggled during the pandemic, with many retailers shutting down.
Coca-Cola’s fourth-quarter results are expected to show additional gains from innovations and digital investments. The company has seen increased activity in e-commerce, with the growth rate doubling in many countries. KO has also been expanding its investments to build strong digital capabilities.
However, the company has also seen pressures from higher supply-chain costs, including rising commodity input costs and transportation, as inflation has continued to soar worldwide. These pressures could be a severe headwind to the fourth-quarter results. Traders should play any disappointing numbers down to the November lows.
