Coca-Cola Trades Below 200-Day SMA: Opportunity or Warning Sign?

Shares of The Coca-Cola Company KO have trended lower in recent months, slipping below key industry benchmarks and signaling weakening technical momentum. The bearish tone intensified on Jan. 5, 2026, when KO fell below its 200-day simple moving average (SMA). The stock closed at $67.94 that day, under the 200-day SMA of $68.99, reinforcing the stock’s downside pressure.

A move below the 200-day SMA typically signals technical weakness, often marking a shift from long-term bullish to bearish sentiment. It reflects waning investor confidence and muted buying interest, particularly after an extended period of underperformance.

Adding to the pressure, the soft-drinks giant slipped below its 50-day SMA on Dec. 23, 2025, and has remained under this level, pointing to a sustained short-term downtrend.

The SMA is a key technical indicator that smooths short-term price volatility, helping investors better assess trend strength and a stock’s longer-term directional bias.

KO Stock Trades Below 50 & 200-Day SMAs

Coca-Cola has shown a lackluster performance, with its shares losing 3.4% in the past six months compared with the Zacks Beverages – Soft Drinks industry’s decline of 1.3%. The KO stock has also underperformed the S&P 500's rally of 13.8% in the same period. Nonetheless, the KO stock fared better than the broader Zacks Consumer Staples sector’s decline of 8.1% in the past six months.

KO’s performance is notably weaker than that of its competitors, PepsiCo Inc. PEP, Monster Beverage Corporation MNST and The Vita Coco Company COCO, which have rallied 2.9%, 22.9% and 38.4%, respectively, in the past six months.

Coca-Cola’s 6-Month Price Performance

At its current price of $67.84, the KO stock trades 11.7% above its 52-week low mark of $60.71 and 8.8% below its 52-week high mark of $74.38.

Explaining KO’s Ongoing Downtrend

Shares of Coca-Cola are facing pressure as investors weigh a challenging operating backdrop, marked by uneven volume trends and cautious expectations for the year ahead. While management reiterated confidence in its full-year guidance, the third-quarter 2025 earnings call underscored persistent headwinds across several key markets that are affecting sentiment.

Volume growth remains fragile. North America showed only flat volumes, reflecting continued pressure on middle and lower-income consumers, and slower traffic across channels. More concerning, the Asia Pacific volumes declined across all operating units, driven by weaker consumer spending and unfavorable weather in markets such as India and the Philippines. Europe also saw volume declines as it cycled through tougher comparisons, while Latin America volumes stayed flat amid macroeconomic stress in Mexico.

Management acknowledged that recent improvements were largely execution-driven rather than a sign of a stronger demand environment, suggesting limited visibility for a sustained rebound. Looking ahead, Coca-Cola expects tougher volume comparisons in the fourth quarter, adding uncertainty to near-term momentum. As inflation moderates, pricing power is expected to normalize, shifting greater emphasis toward volume-led growth — a transition that may take time to materialize.

Together, these factors are weighing on investor confidence, keeping the KO stock under pressure despite the company’s resilient portfolio and long-term growth strategy.

Estimate Revision Trend for KO

The Zacks Consensus Estimate for Coca-Cola’s 2025 and 2026 EPS were unchanged in the last 30 days. For 2025, the Zacks Consensus Estimate for KO’s revenues and EPS implies 2.7% and 3.5% year-over-year growth, respectively. The consensus mark for 2026 revenues and earnings suggests 5.6% and 8% growth, respectively.

Coca-Cola’s Valuation

KO’s current forward 12-month price-to-earnings (P/E) multiple of 21.04X is significantly higher than the Zacks Beverages – Soft Drinks industry average of 17.64X, making the stock appear relatively expensive. However, the company’s P/E multiple reflects a significant discount to the S&P 500’s multiple of 23.25X.

At 21.04X P/E, Coca-Cola trades at a significant premium to its key rival, PepsiCo. Although PepsiCo shares rally above Coca-Cola, its P/E multiple of 16.23X is significantly lower than that of KO. Nonetheless, KO’s peers, such as Monster Beverage and Vita Coco, are delivering solid growth and trade at premium multiples. Monster Beverage and Vita Coco have forward 12-month P/E ratios of 33.56X and 32.77X, respectively, significantly higher than KO. 

Is KO Still Worth a Bet?

Coca-Cola’s recent stock performance reflects a confluence of technical weakness, fundamental headwinds and valuation concerns. KO’s slide below both its 50-day and 200-day SMAs underscores fading momentum and a shift toward bearish sentiment, limiting near-term upside potential. KO has also underperformed the broader market and several key peers, reinforcing investor caution.

On the fundamentals side, pressure on volumes across multiple geographies, uneven consumer demand and tougher near-term comparisons continue to cloud visibility. While management remains confident in meeting its full-year guidance, recent improvements appear largely execution-driven rather than demand-led, suggesting that a sustained rebound may take time. At the same time, moderating inflation is expected to affect pricing power, placing greater reliance on volume growth.

Against this backdrop, Coca-Cola’s premium valuation relative to its industry appears demanding. Combined with the ongoing downward share trend, these factors suggest investors should remain wary of this Zacks Rank #4 (Sell) stock at current levels.

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This article originally published on Zacks Investment Research (zacks.com).

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