Coca-Cola is a stronger company post-Covid, according to Citi. Analyst Filippo Falorni named Coca-Cola as one of his top buy-rated picks in the U.S. beverages and household products sector. Falorni set his price target at $68, implying a 14.8% upside from Thursday’s closing price of $59.22. Coca-Cola is one of the “names that have de-rated on near-term temporary concerns, offer[ing] a gross margin improvement story with declining commodity prices,” the analyst wrote in a Thursday note. He added that the beverage giant “can navigate well through weaker macro conditions, and/or offer compelling long-term growth stories” at a reasonable valuation. Coca-Cola on Tuesday reported a fourth-quarter revenue beat , driven by higher prices for its drinks, while per-share earnings came in line with analysts’ expectations. The company noted that while European consumer demand is more muted due to soaring inflation, China’s reopening will likely boost sales this year. “KO has emerged as a stronger company post-COVID with a more effective networked organizational model aiding market share gains and innovation, and an improved margin structure with a more efficient advertising spend,” Falorni wrote. The analyst added, “Near-term, we also see potential topline/EPS upside with momentum exiting Q4, strong pricing power, solid emerging markets growth. We view KO’s valuation close to the average of mega-cap peers as compelling given a stronger topline growth and higher margin profile.” Coca-Cola shares rose 7.4% in 2022, but the stock has fallen nearly 7% since the start of the year. —CNBC’s Michael Bloom contributed to this report.
