KO Weiss

December 29, 2019
NYSE: KO
COCA-COLA CO
BUY HOLD SELL
BUY
RATING SINCE 07/18/2018
A+ A A- B+ B B- C+ C C- D+ D D- E+ E E- F TARGET PRICE $68.50
Annual Dividend Rate Annual Dividend Yield Beta Market Capitalization 52-Week Range Price as of 12/26/2019
$1.60 2.90% 0.42 $235.7 Billion $44.42-$55.92 $55.02
Sector: Manufacturing Industry Group: Beverage Manufacturing

Weekly Price: (US$) SMA (50) SMA (100) 1 Year 2 Years
KO BUSINESS DESCRIPTION
The Coca-Cola Company, a beverage company, 70
manufactures and distributes various nonalcoholic TARGET
TARGET
TARGETPRICE
TARGET PRICE
PRICE$68.50
$68.50
$68.50
beverages worldwide. The company provides 65
sparkling soft drinks; water, enhanced water, and
sports drinks; juice, dairy, and plant-based 60
beverages; teas and coffees; and energy drinks.
55
STOCK PERFORMANCE (%)
3 Mo. 1 Yr. 3 Yr (Ann) 50
Price Change 1.15 17.21 9.77
45
GROWTH (%)
Last Qtr 12 Mo. 3 Yr CAGR 40
Revenues 8.34 3.67 -6.01 Rating History
Net Income 37.92 175.53 2.41 HOLD BUY
EPS 36.36 178.12 2.56
Volume in Millions
200
RETURN ON EQUITY (%)
KO Subsector Avg S&P 500 100
Q3 2019 40.99 28.84 15.63
Q3 2018 15.02 19.34 14.82 0
2018 2019
Q3 2017 20.57 18.74 13.41 COMPUSTAT for Price and Volume, TheStreet Ratings, Inc. for Rating History
P/E COMPARISON RECOMMENDATION

We rate COCA-COLA CO (KO) a BUY. This is based on the convergence of positive investment measures,
which should help this stock outperform the majority of stocks that we rate. The company's strengths can be
seen in multiple areas, such as its revenue growth, notable return on equity, impressive record of earnings
per share growth, compelling growth in net income and good cash flow from operations. We feel its
strengths outweigh the fact that the company has had generally high debt management risk by most
measures that we evaluated.
HIGHLIGHTS
30.91 26.80 23.95 KO's revenue growth has slightly outpaced the subsector average of 6.3%. Since the same quarter one year
prior, revenues slightly increased by 8.3%. Growth in the company's revenue appears to have helped boost
KO Subsector Avg S&P 500
the earnings per share.
EPS ANALYSIS¹ ($) COCA-COLA CO has improved earnings per share by 36.4% in the most recent quarter compared to the same
quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the
Q1 0.27
Q4 0.18
past year. We feel that this trend should continue. During the past fiscal year, COCA-COLA CO increased its
Q2 0.54
Q2 0.61
Q3 0.60
bottom line by earning $1.48 versus $0.26 in the prior year. This year, the market expects an improvement in
earnings ($2.10 versus $1.48).
Q2 0.32
Q3 0.33
Q4 -0.66
Q1 0.32
Q3 0.44
Q1 0.39
The company, on the basis of net income growth from the same quarter one year ago, has significantly
outperformed against the S&P 500 and exceeded that of the Beverage and Tobacco Product Manufacturing
subsector average. The net income increased by 37.9% when compared to the same quarter one year prior,
rising from $1,880.00 million to $2,593.00 million.
2017 2018 2019
NA = not available NM = not meaningful
The company's current return on equity greatly increased when compared to its ROE from the same quarter
one year prior. This is a signal of significant strength within the corporation. Compared to other companies in
1 Compustat fiscal year convention is used for all fundamental
data items. the Beverage and Tobacco Product Manufacturing subsector and the overall market, COCA-COLA CO's return
on equity significantly exceeds that of both the subsector average and the S&P 500.
Net operating cash flow has slightly increased to $3,270.00 million or 8.85% when compared to the same
quarter last year. In addition, COCA-COLA CO has also modestly surpassed the subsector average cash flow
growth rate of 7.38%.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet nor any other party guarantees its accuracy or Report Date: December 29, 2019 PAGE 1
makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet, Inc. Copyright(c) 2006-2019. All rights reserved.
December 29, 2019
NYSE: KO
COCA-COLA CO
Sector: Manufacturing Beverage Manufacturing
$1.60 2.90% 0.42 $235.7 Billion $44.42-$55.92 $55.02
PEER GROUP ANALYSIS SUBSECTOR ANALYSIS

REVENUE GROWTH AND EBITDA MARGIN*
COCA-COLA CO falls within the Manufacturing sector and the Beverage Manufacturing industry group of the
North American Industry Classification System or NAICS. More precisely, a significant portion of company
350%
activities involve Soft Drink Manufacturing.

KDP
FA
VO
TheStreet Quant Ratings is currently tracking 1923 companies in the Manufacturing sector that total around
RA
BL
$18,166 billion in market capitalization as well as $9,559 billion in annual sales.

E
The Beverage and Tobacco Product Manufacturing subsector accounts for 4.0% of those revenues.
Industries in the Beverage and Tobacco Product Manufacturing subsector manufacture beverages and
Revenue Growth (TTM)
tobacco products. The Beverage Manufacturing industry group includes three types of establishments: (1)
those that manufacture nonalcoholic beverages; (2) those that manufacture alcoholic beverages through the
fermentation process; and (3) those that produce distilled alcoholic beverages. Ice manufacturing, while not
UN
FA
a beverage, is included with nonalcoholic beverage manufacturing because it uses the same production
VO
-50%
process as water purification.The Tobacco Manufacturing industry group includes two types of
RA
COKE PRMW KOF

PEP KO
AKO.B COTFIZZ MNST
B
AKO.A establishments: (1) those engaged in redrying and stemming tobacco and (2) those that manufacture tobacco
LE
5% 40% products, such as cigarettes and cigars.

EBITDA Margin (TTM)
Companies with higher EBITDA margins and PEER GROUP: Beverage and Tobacco Product Manufacturing
revenue growth rates are outperforming companies Recent Market Price/ Net Sales Net Income
with lower EBITDA margins and revenue growth Ticker Company Name Price ($) Cap ($M) Earnings TTM ($M) TTM ($M)
rates. Companies for this scatter plot have a market
KO COCA-COLA CO 55.02 235,733 30.91 35,256.00 7,748.00
capitalization between $453.2 Million and $235.7
Billion. Companies with NA or NM values do not PRMW PRIMO WATER CORP 11.55 453 128.33 307.16 3.95
appear. KDP KEURIG DR PEPPER INC 28.82 40,544 36.95 10,999.00 1,114.00
*EBITDA – Earnings Before Interest, Taxes, Depreciation and MNST MONSTER BEVERAGE CORP 63.88 34,347 32.10 4,107.84 1,091.99
Amortization. KOF COCA-COLA FEMSA SAB DE CV 60.77 3,192 38.71 9,513.81 839.64
REVENUE GROWTH AND EARNINGS YIELD AKO.B EMBOTELLADORA ANDINA SA 16.68 2,505 15.03 2,392.10 174.15
AKO.A EMBOTELLADORA ANDINA SA 15.08 2,505 13.59 2,392.10 174.15
350%
FIZZ NATIONAL BEVERAGE CORP 51.50 2,398 20.36 975.99 118.14

KDP COKE COCA COLA CONSOLIDATED INC 292.64 2,090 NM 4,784.17 -5.43
FA
VO
PEP PEPSICO INC 136.69 190,605 15.60 66,045.00 12,402.00

RA
BL
COT COTT CORP QUE 13.36 1,800 NM 2,393.50 -4.50

E
The peer group comparison is based on Major Beverage and Tobacco Product Manufacturing companies of comparable size.
Revenue Growth (TTM)
UN
FA
VO
-50%
COT PRMW KOFMNST

RA
KO PEP
FIZZ AKO.A
B
COKE
LE
-1% AKO.B 8%
Earnings Yield (TTM)
Companies that exhibit both a high earnings yield
and high revenue growth are generally more
attractive than companies with low revenue growth
and low earnings yield. Companies for this scatter
plot have revenue growth rates between -8.2% and
302.6%. Companies with NA or NM values do not
appear.
December 29, 2019
NYSE: KO
COCA-COLA CO
$1.60 2.90% 0.42 $235.7 Billion $44.42-$55.92 $55.02
COMPANY DESCRIPTION STOCK-AT-A-GLANCE

The Coca-Cola Company, a beverage company, Below is a summary of the major fundamental and technical factors we consider when determining our
manufactures and distributes various nonalcoholic overall recommendation of KO shares. It is provided in order to give you a deeper understanding of our rating
beverages worldwide. The company provides sparkling methodology as well as to paint a more complete picture of a stock's strengths and weaknesses. It is
soft drinks; water, enhanced water, and sports drinks; important to note, however, that these factors only tell part of the story. To gain an even more comprehensive
juice, dairy, and plant-based beverages; teas and understanding of our stance on the stock, these factors must be assessed in combination with the stock’s
coffees; and energy drinks. It also offers concentrates, valuation. Please refer to our Valuation section on page 5 for further information.
syrups, beverage bases, source waters, and
powders/minerals, as well as fountain syrups to fountain FACTOR SCORE
retailers, such as restaurants and convenience stores.
The company sells its products primarily under the Growth out of 5 stars 3.5
Coca-Cola, Diet Coke/Coca-Cola Light, Coca-Cola Zero Measures the growth of both the company's income statement and weak strong
Sugar, Fanta, Schweppes, Sprite, Thums Up, Aquarius, cash flow. On this factor, KO has a growth score better than 60% of the
Dasani, glaceau smartwater, glaceau vitaminwater, Ice stocks we rate.
Dew, I LOHAS, Powerade, AdeS, Del Valle, innocent,
Minute Maid, Minute Maid Pulpy, Simply, ZICO, Ayataka,
Costa, FUZE TEA, Georgia, Gold Peak, and HONEST TEA
Total Return out of 5 stars 4.0
brands. The Coca-Cola Company offers its beverage Measures the historical price movement of the stock. The stock weak strong
products through a network of company-owned or performance of this company has beaten 70% of the companies we
controlled bottling and distribution operators, as well as cover.
through independent bottling partners, distributors,
wholesalers, and retailers. The company was founded in Efficiency out of 5 stars 5.0
1886 and is headquartered in Atlanta, Georgia. Measures the strength and historic growth of a company's return on weak strong
invested capital. The company has generated more income per dollar of
COCA-COLA CO capital than 90% of the companies we review.
One Coca-Cola Plaza
Atlanta, GA 30313
USA
Price volatility out of 5 stars 5.0
Phone: 404-676-2121 Measures the volatility of the company's stock price historically. The weak strong
http://www.coca-colacompany.com stock is less volatile than 90% of the stocks we monitor.
Employees: 63000
Solvency out of 5 stars 5.0
Measures the solvency of the company based on several ratios. The weak strong
company is more solvent than 90% of the companies we analyze.
Income out of 5 stars 4.0

Measures dividend yield and payouts to shareholders. The company's weak strong
dividend is higher than 70% of the companies we track.
THESTREET QUANT RATINGS RESEARCH METHODOLOGY
TheStreet Quant Ratings' stock model projects a stock's total return potential over a 12-month period
including both price appreciation and dividends. Our Buy, Hold or Sell ratings designate how we expect these
stocks to perform against a general benchmark of the equities market and interest rates. While our model is
quantitative, it utilizes both subjective and objective elements. For instance, subjective elements include
expected equities market returns, future interest rates, implied industry outlook and forecasted company
earnings. Objective elements include volatility of past operating revenues, financial strength, and company
cash flows.
Our model gauges the relationship between risk and reward in several ways, including: the pricing drawdown
as compared to potential profit volatility, i.e.how much one is willing to risk in order to earn profits; the level of
acceptable volatility for highly performing stocks; the current valuation as compared to projected earnings
growth; and the financial strength of the underlying company as compared to its stock's valuation as
compared to projected earnings growth; and the financial strength of the underlying company as compared
to its stock's performance. These and many more derived observations are then combined, ranked, weighted,
and scenario-tested to create a more complete analysis. The result is a systematic and disciplined method of
selecting stocks.
December 29, 2019
NYSE: KO
COCA-COLA CO
$1.60 2.90% 0.42 $235.7 Billion $44.42-$55.92 $55.02
Consensus EPS Estimates² ($) FINANCIAL ANALYSIS

IBES consensus estimates are provided by Thomson Financial COCA-COLA CO's gross profit margin for the third quarter of its fiscal year 2019 is essentially unchanged
when compared to the same period a year ago. The company managed to grow both sales and net income at
a faster pace than the average competitor in its subsector this quarter as compared to the same quarter a
year ago. COCA-COLA CO has weak liquidity. Currently, the Quick Ratio is 0.69 which shows a lack of ability to
cover short-term cash needs. The company's liquidity has decreased from the same period last year.
At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by
2.45% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in
0.44 2.10 E 2.25 E a position in which financial difficulties could develop in the future.
Q4 FY19 2019(E) 2020(E)
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the
next 12-months. To learn more visit www.TheStreetRatings.com.
INCOME STATEMENT
Q3 FY19 Q3 FY18
Net Sales ($mil) 9,507.00 8,775.00
EBITDA ($mil) 2,986.00 3,019.00
EBIT ($mil) 2,623.00 2,765.00
Net Income ($mil) 2,593.00 1,880.00
BALANCE SHEET
Q3 FY19 Q3 FY18
Cash & Equiv. ($mil) 12,988.00 18,847.00
Total Assets ($mil) 87,433.00 86,877.00
Total Debt ($mil) 43,805.00 44,837.00
Equity ($mil) 18,713.00 18,264.00
PROFITABILITY
Q3 FY19 Q3 FY18
Gross Profit Margin 64.19% 64.76%
EBITDA Margin 31.40% 34.40%
Operating Margin 27.59% 31.51%
Sales Turnover 0.40 0.39
Return on Assets 8.86% 3.23%
Return on Equity 40.99% 15.02%
DEBT
Q3 FY19 Q3 FY18
Current Ratio 0.92 1.06
Debt/Capital 0.70 0.71
Interest Expense 230.00 241.00
Interest Coverage 11.40 11.47
SHARE DATA
Q3 FY19 Q3 FY18
Shares outstanding (mil) 4,284 4,256
Div / share 0.40 0.39
EPS 0.60 0.44
Book value / share 4.37 4.29
Institutional Own % NA NA
Avg Daily Volume 11,149,376 11,636,824
2 Sum of quarterly figures may not match annual estimates due to
use of median consensus estimates.
December 29, 2019
NYSE: KO
COCA-COLA CO
$1.60 2.90% 0.42 $235.7 Billion $44.42-$55.92 $55.02
RATINGS HISTORY VALUATION

Our rating for COCA-COLA CO has not changed BUY. COCA-COLA CO's P/E ratio indicates a premium compared to an average of 25.60 for the Beverage and
since 7/18/2018. As of 12/26/2019, the stock was Tobacco Product Manufacturing subsector and a premium compared to the S&P 500 average of 23.95. For
trading at a price of $55.02 which is 1.6% below its additional comparison, its price-to-book ratio of 12.60 indicates a significant premium versus the S&P 500
52-week high of $55.92 and 23.9% above its 52-week average of 3.58 and a significant premium versus the subsector average of 9.65. The price-to-sales ratio is
low of $44.42. well above both the S&P 500 average and the subsector average, indicating a premium. Upon assessment of
these and other key valuation criteria, COCA-COLA CO proves to trade at a premium to investment
2 Year Chart alternatives.
$60
HOLD: $45.81
BUY: $45.12
$55 Price/Earnings 1 2 3 4 5 Price/CashFlow 1 2 3 4 5

premium discount premium discount
$50 KO 30.91 Peers 26.80 KO 24.30 Peers 22.12
• Premium. A higher P/E ratio than its peers can • Average. The P/CF ratio, a stock’s price divided by
$45 signify a more expensive stock or higher growth the company's cash flow from operations, is useful
expectations. for comparing companies with different capital
2018 • KO is trading at a premium to its peers. requirements or financing structures.
• KO is trading at a valuation on par to its peers.
MOST RECENT RATINGS CHANGES

Price/Projected Earnings 1 2 3 4 5 Price to Earnings/Growth 1 2 3 4 5
premium discount premium discount
Date Price Action From To KO 24.45 Peers 23.79 KO 0.91 Peers 1.70
7/18/18 $45.12 Upgrade Hold Buy • Premium. A higher price-to-projected earnings ratio • Discount. The PEG ratio is the stock’s P/E divided
12/26/17 $45.81 No Change Hold Hold than its peers can signify a more expensive stock by the consensus estimate of long-term earnings
Price reflects the closing price as of the date listed, if available or higher future growth expectations. growth. Faster growth can justify higher price
• KO is trading at a premium to its peers. multiples.
• KO trades at a significant discount to its peers.
RATINGS DEFINITIONS &
DISTRIBUTION OF THESTREET RATINGS Price/Book 1 2 3 4 5 Earnings Growth 1 2 3 4 5
premium discount lower higher
(as of 12/26/2019)
KO 12.60 Peers 9.65 KO 178.12 Peers 88.23
38.78% Buy - We believe that this stock has the • Premium. A higher price-to-book ratio makes a • Higher. Elevated earnings growth rates can lead to
opportunity to appreciate and produce a total return of stock less attractive to investors seeking stocks capital appreciation and justify higher
more than 10% over the next 12 months. with lower market values per dollar of equity on the price-to-earnings ratios.
balance sheet. • KO is expected to have an earnings growth rate
32.43% Hold - We do not believe this stock offers • KO is trading at a significant premium to its peers. that significantly exceeds its peers.
conclusive evidence to warrant the purchase or sale of
shares at this time and that its likelihood of positive total Price/Sales 1 2 3 4 5 Sales Growth 1 2 3 4 5
premium discount lower higher
return is roughly in balance with the risk of loss.
KO 6.69 Peers 4.65 KO 3.67 Peers 12.59
28.79% Sell - We believe that this stock is likely to • Premium. In the absence of P/E and P/B multiples, • Lower. A sales growth rate that trails the subsector
decline by more than 10% over the next 12 months, with the price-to-sales ratio can display the value implies that a company is losing market share.
the risk involved too great to compensate for any investors are placing on each dollar of sales. • KO significantly trails its peers on the basis of sales
possible returns. • KO is trading at a significant premium to its growth.
subsector.
TheStreet Quant Ratings DISCLAIMER:

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TheStreet Quant Ratings is a division of TheStreet, Inc., which is a publisher. This research report contains opinions and is
provided for informational purposes only. You should not rely solely upon the research herein for purposes of transacting
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advice of a qualified securities professional, before you make any investment. None of the information contained in this report
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Use found at http://www.thestreet.com/static/about/terms-of-use.html.
NAICS is the North American Industry Classification System which provides the Sector, Subsector, and Industry Group
structure used in this report. As many companies are diversified, the companies may also operate in other industry segments
than the one listed.

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December 29, 2019

Sector: Manufacturing Industry Group: Beverage Manufacturing

P/E COMPARISON RECOMMENDATION

PEER GROUP ANALYSIS SUBSECTOR ANALYSIS

activities involve Soft Drink Manufacturing.

$18,166 billion in market capitalization as well as $9,559 billion in annual sales.

COKE PRMW KOF

5% 40% products, such as cigarettes and cigars.

FIZZ NATIONAL BEVERAGE CORP 51.50 2,398 20.36 975.99 118.14

PEP PEPSICO INC 136.69 190,605 15.60 66,045.00 12,402.00

COT COTT CORP QUE 13.36 1,800 NM 2,393.50 -4.50

COT PRMW KOFMNST

COMPANY DESCRIPTION STOCK-AT-A-GLANCE

Income out of 5 stars 4.0

THESTREET QUANT RATINGS RESEARCH METHODOLOGY

Consensus EPS Estimates² ($) FINANCIAL ANALYSIS

RATINGS HISTORY VALUATION

$55 Price/Earnings 1 2 3 4 5 Price/CashFlow 1 2 3 4 5

MOST RECENT RATINGS CHANGES

TheStreet Quant Ratings DISCLAIMER:

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