Coca-Cola Stock Reflects Modest Growth in 3 Months: Buy Now or Wait?

The Coca-Cola Company KO stock has shown a modest performance in the past three months, rising just 1.5%, reflecting investor caution despite stable fundamentals. The company’s first-quarter fiscal 2025 results revealed a slower volume growth environment, particularly in North America, where inflationary pressures and cautious consumer behavior have weighed on demand.

While net revenues rose 3% organically and pricing remained strong, overall momentum was tempered by softer trends in away-from-home consumption and limited near-term upside in developed markets. Additionally, management maintained a conservative full-year outlook, reinforcing concerns around potential macro headwinds and limited earnings acceleration in the near term.

Despite a slowed performance, Coca-Cola’s shares outperformed the Zacks Beverages – Soft Drinks industry, which declined 0.3% in the past three months. Meanwhile, the KO stock has underperformed the broader Zacks Consumer Staples sector and the S&P 500's growth of 3.8% and 15.1%, respectively, in the same period.

KO’s performance is notably weaker than that of its competitor, Monster Beverage MNST, which rallied 7.6% in the past three months. Then again, the KO stock has outperformed peers like PepsiCo Inc. PEP and Keurig Dr Pepper Inc.’s KDP declines of 7.7% and 2.7%, respectively, in the same period.

Coca-Cola Stock’s 3-Month Return

At the current share price of $71.01, Coca-Cola trades 4.5% below its recent 52-week high mark of $74.38. Also, the KO stock trades 17.1% above its 52-week low of $60.62.

KO trades above its 200-day moving average and below its 50-day moving average, indicating a mixed sentiment. The moving average is an important indicator for gauging market trends and momentum.

KO Stock Trades Below 50-Day & Above 200-Day Moving Averages

Coca-Cola: Stability, Innovation & Global Reach

KO continues to demonstrate resilience through strong fundamentals, even amid a challenging macro backdrop. In first-quarter fiscal 2025, the company delivered organic revenue growth of 3%, driven by a healthy balance of pricing, volume and product mix. Strategic pricing actions and positive mix, boosted by higher growth in single-serve packs and premium offerings, helped sustain gross margins, even as some markets faced volume softness. The company’s ability to maintain price/mix strength without compromising competitiveness underlines the durability of its brand portfolio and disciplined execution.

Digital transformation is also emerging as a growth lever. Coca-Cola’s digital-first marketing and personalization strategies are deepening consumer engagement and improving conversion, particularly in emerging markets. Its innovation pipeline remains robust, with the latest launches such as Coca-Cola Spiced and expanded entries into hydration and energy categories helping drive consumer excitement and retail momentum. Marketing spend has been elevated, with management reaffirming its commitment to “world-class marketing” and integrated global campaigns, efforts that continue to reinforce brand equity and pricing power.

While volume growth was slightly subdued in North America due to inflationary headwinds, KO posted stronger performance in Latin America, the Asia Pacific and Africa. The company’s broad geographic footprint and agile operating model position it well to navigate regional volatility. Backed by strong free cash flow generation, disciplined capital allocation and a consistent dividend policy, Coca-Cola remains a compelling long-term investment for those seeking steady growth, innovation-driven momentum and global scale advantage.

Estimate Revision Trend for KO

The Zacks Consensus Estimate for Coca-Cola’s 2025 EPS moved up by a penny in the last 30 days. The upward revision in earnings estimates indicates analysts’ confidence in the stock. Meanwhile, the consensus estimate for 2026 EPS has been unchanged in the past 30 days.

For 2025, the Zacks Consensus Estimate for KO’s revenues and EPS implies 2.5% and 3.1% year-over-year growth, respectively. The consensus mark for 2026 revenues and earnings suggests 5.3% and 8.2% year-over-year growth, respectively. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

Is Coca-Cola’s Valuation Premium Justified?

KO’s current forward 12-month price-to-earnings (P/E) multiple of 22.97X raises concerns about whether the stock's valuation is justified. This multiple is significantly higher than the Zacks Beverages – Soft Drinks industry average of 18.66X, making the stock appear relatively expensive.

At 22.97X P/E, Coca-Cola trades at a significant premium to most of its industry peers. The company’s peers, such as PepsiCo and Keurig Dr Pepper, are delivering solid growth and trade at more reasonable multiples, while Monster Beverage trades at a premium multiple. PepsiCo and Keurig Dr Pepper have forward 12-month P/E ratios of 16.63X and 16.01X, significantly lower than KO. However, Monster Beverage trades at a P/E multiple of 31.87X.

The KO stock’s premium valuation suggests that investors have strong expectations for its growth. However, the stock currently seems somewhat overvalued. Coca-Cola’s ability to meet or exceed these lofty expectations is crucial in justifying its premium pricing.

Should You Buy KO Stock Now?

Coca-Cola offers a compelling mix of steady returns, defensive stability and long-term upside potential. Its steady year-to-date price performance and promising earnings outlook reinforce its investment case. While KO trades at a premium compared with its peers, this valuation likely underscores market confidence in its ability to deliver consistent earnings, margin resilience and innovation-led growth, even amid macroeconomic uncertainties. Pullbacks tied to market volatility can serve as strategic entry points.

Backed by these trends, adding this Zacks Rank #2 (Buy) stock to a diversified portfolio may prove a prudent move for investors seeking reliable exposure to a global consumer staple leader. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

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

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