Parkev Tatevosian, CFA on $KO (Nov 1, 2026)

Coca-Cola announced its quarterly financial results showing revenue growth of 7%, and perhaps most impressively, a 5% increase in unit sales volume, proving that people are buying more Coca-Cola products, and it's not just a result of higher prices.

The results were so good that Coca-Cola's management team revised its forecasts for the remainder of 2026, now expecting revenue growth of at least 5% and earnings per share growth of at least 9%.

The management team also stated that they will generate at least $12 billion in free cash flow this year. I should say $13 billion of free cash flow for this year.

It is no surprise that Coca-Cola's stock has jumped thanks to these excellent results, and has already risen by at least 31% since the beginning of the year. Of course, I'm happy about that.

I have rated Coca-Cola stock as an excellent buying opportunity throughout the year . So, I am pleased to see the company succeed here in 2026.

So, after these amazing results, I have revised my forecast for Coca-Cola and wanted to share those details with you here and update you on whether I still think Coca-Cola stock represents a buying opportunity at this time, even after the stock price has already risen so much .

Therefore, analysts on Wall Street who follow Coca-Cola closely have also raised their estimates for Coca-Cola's earnings per share. Since 2025, when Wall Street analysts were predicting Coca-Cola's earnings per share growth of about 5.5% over the next few years, they have now revised those expectations upward to 7.4% earnings per share growth over the next few years.

If you were to ask me for my estimate of Coca-Cola's earnings per share growth over the next few years, it would be closer to 8% or 9% rather than closer to 7 % or 6%.

The company has done a great job in implementing its business plan. And remember, if you haven't seen the headlines, they just won a major customer, KFC, snatching it from Pepsi-Cola.

They now have this exclusive relationship to serve thousands of those sites. This relationship will begin in 2027 .

Therefore, Coca-Cola is making great strides, especially in out-of-home sales channels such as restaurants, parks, cinemas, and others. Coca-Cola has a strong market share in these categories.

However, consumer budgets are under pressure as a result of tariffs and the war that has caused oil prices to rise , and personal income has not risen at the same rate as the cost of basic living, forcing people to make difficult decisions.

If consumer spending declines, Coca-Cola's business could be significantly affected.

Coca-Cola's success in 2026 was almost a continuous and direct upward trend , wasn't it? I know the road up has been choppy, but most stocks experience much stronger ups and downs than you see with Coca-Cola, which started the year slightly in the red, dropping to around $65.

Since then, the trend has been almost straight up, and the stock is now at $92, up more than 31.6% since the start of the year, plus dividends that could raise returns to nearly 40% by the end of 2026.

This is a very strong year for Coca-Cola. If I owned Coca-Cola shares, I would be happy with a 10% annual return on share price gains plus a 10% dividend payout. I would feel that I am getting a great return for the risk I am taking with Coca-Cola, which is relatively less risky than most stocks in the market.

Therefore, a return rate approaching 40% in one year is equivalent to four years' worth of profits in one year for Coca-Cola stock investors. Thus, an increase in the share price also leads to an increase in valuation.

Coca-Cola's profits have by no means increased in line with the rise in its share price, as I explained or shared with you earlier. Management expects earnings per share to grow by 9% in 2026, while its share price has risen by more than 30%.

Therefore, price precedes profit, and this creates a more expensive valuation.

The stock started trading at a forward P/E ratio of around 20. It is now trading at a forward P/E ratio of around 26.

Similarly, I stated that I would be revising my estimates for Coca-Cola's free cash flow for 2026 and beyond, as performance has been better than I estimated the last time I valued the company.

Therefore, I have raised my free cash flow estimates, and I now calculate the fair value of the stock at $96 compared to the current market price of $92.

Overall, I would say that Coca-Cola stock appears to be fairly valued based on a comprehensive assessment. As I mentioned, I have rated Coca-Cola stock as a buy opportunity with a high level of conviction and high level of confidence throughout the year.

Today, I reaffirmed this classification. It is one of the most distinguished companies in the world and is traded at a fair price. And I always say that when you can get an excellent business at a fair price, it's a good deal for long-term investors.