Tomorrow before the market open, Coca-Cola Company (KO.US) will show its results for 1Q24. Banking analysts anticipate that the decline in inflation dynamics in global markets will translate into lower sales results for the company's products. Furthermore, in the past four weeks there have been downward revisions in metrics forecasts regarding sales volumes (revisions following declines in this metric for last week's reporting company, PepsiCo).
It's also worth noting the impact of exchange rate changes in the FX market, as two-thirds of the company's sales value comes from international markets. These can have significant implications in analyzing the company's results (at this point, it is expected that the quarterly dynamics of FX market changes will lower the company's results by 4.15%)*.
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Create account Try a demo Download mobile app Download mobile app*In February, Coca-Cola forecasted that in 2024, comparable net revenues would be 2-3% lower in currency terms and 4-5% lower in adjusted earnings per share terms.
The market consensus expects a flat dynamic in most of the company's significant financial data. Revenue is predicted at $10.95 billion (-0.1% y/y), expected operating profit stands at $3.51 billion (+0.75% y/y), and adjusted earnings per share at $0.70 (flat y/y).
For last 4 quarters, the company consistently showed results above consensus (in terms of profitability and organic revenue growth), however, there's a trend towards smaller deviations between forecasted and final results. The case of PepsiCo also shows that surpassing consensus may not be enough to sustain the price growth we've seen during last 10 days, and investors during this earnings season are paying closer attention to specific metrics, such as the dynamics of revenue growth in key markets rather than overall financial situation.
Selected financial metrics of the company and forecasts of their changes based on analysts' consensus surveyed by Bloomberg agency. Source: XTB Research
The implied move in the company's stocks during tomorrow's session, as indicated by the options market, is estimated at 1.9%. Source: xStation
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