Bank of America Reiterates "Buy" Rating on Coca-Cola (KO)

Bank of America Reiterates “Buy” Rating on Coca-Cola (KO)


Bank of America reported on Thursday that it has reaffirmed its current “Buy” rating on beverage company, The Coca-Cola Company (KO).

The firm has maintained a “Buy” rating and $41 price target on KO. This price target suggests a 5% increase from the stock’s current price of $38.88.

An analyst from the firm commented, “we recently attended an offsite meeting of KO business unit presidents. The meetings provided an opportunity to interact with business unit leaders which enabled us to make the following qualitative observations: 1) Our impression is that managers are generally optimistic about prospects to generate the growth required to achieve the company’s 2020 vision and goals; 2) The continuity of strategy and management may be perceived as “boring” by some investors relative to the myriad of turnaround stories in the food and beverage peer group, however re-accelerating sales and profit growth will enable KO to recapture investor attention; 3) Despite the recent macro headwinds, the company appears committed to maintaining investment in marketing, R&D, and growth capital; 4) There is a willingness to explore adjacent categories via strategic M&A (Santa Clara in Mexico is an example) and investment in innovation; 5) Marketing around the obesity/wellness area is a meaningful component of the strategy and we expect to hear more about this in coming months; 6) Questions regarding ROIC and bottlers suggest to us there is a thoughtful process regarding how best to maximize value and that there is no “one size fits all” answer; 7) Sustainability is integral to overall strategy.”

Coca-Cola shares were up 29 cents, or 0.75% during Thursday morning trading. The stock has increased 10% in the past year.

The Bottom Line
Shares of The Coca-Cola Company (KO) have a 2.88% yield, based on Thursday morning’s price of $38.86.

The Coca-Cola Company (KO) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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