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Coca-Cola Appears Vulnerable To A Recession

May 26, 2023 2:12 PM ETThe Coca-Cola Company (KO)29 Comments
Skeptical12 profile picture


  • The currency moves that would likely occur if there was a recession would be a significant headwind for the Coca-Cola company's earnings.
  • The company has been relying on unsustainable price increases to offset volume declines and market share losses, a recession should significantly limit the company's pricing power in my opinion.
  • The Stock is trading at a growth multiple, and so the company looks overvalued if earnings estimates fall even slightly.

Moscow, Russia, May 8, 2019. Coca-Cola advertising on the roof of a building in the city center

Georgiy Datsenko

The economic environment has changed significantly in the last three years. While growth rates were stable prior to the pandemic hitting in late 2019, the economy entered into a recession in early 2020. While growth rates stabilized coming out of a

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Skeptical12 profile picture
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Comments (29)

LifelongMetsfan1 profile picture
Does the author feel the same way about PEP?
Skeptical12 profile picture
@LifelongMetsfan1 I do, but Pepsi is also a very different company in many ways. Pepsi has seen stronger organic growth in core brands like Frito-Lays than Coke has.
retired@thebig50 profile picture
So when exactly was the last time that Ko was "undervalued" ??
No Guilt profile picture

Is your argument that you always have to “over pay”? Which is a valid argument by the way.

If so, my counter argument is how has the stock fared over 3, 5, 10, 15, 20 years?

It has underperformed. Bigly.
retired@thebig50 profile picture
@No Guilt My average cost for KO is $5.57 . I've been a holder since 1990 and collected countless dividends along the way. Could I have made more ?? Yes of course , but that is not why I bought it . I own high flyers also, but to me Ko is a bond substitute ,with an increasing yield that will grow over time. Its not Nvidia, Apple, Avgo, or Deere , but its not supposed to be . Its a defensive play.
As for valuation It was overvalued in 1990 also . So are condos in Manhatten facing central park , diamonds , and quality stocks.
No Guilt profile picture

It is long-term under performed the market

Buying the index would’ve worked better
I appreciate the thoughts of the author it certainly makes one think.. Long KO not selling but appreciate your opinion. I am surprised it has not performed better the last 3 years... when you show it versus the S&P!
@Valuestocks007 At what $(price) would You put new money to work in $KO?
@Hugh Arhue I buy it whenever I have cash.. honestly I don't really look at the price.. for great companies.. I just buy them often over a couple of decades it usually works out ok.
riddix profile picture
A recession isn't going to stop people from buying a Coke. Never has, never will.
@riddix and soda too
Bim Ska La Bim profile picture
@24362613 ...and don't forget pop...can't leave out the pop.
No Guilt profile picture

But people are buying less and less soda over time.

Big Democrat cities are also locking their chops to add sugar taxes.
A 6 pack of Coca Cola is now $5.49, who buys it as that price?
LifelongMetsfan1 profile picture
@jimoc coco-cola is huge within the “inner-city” population. They will buy it with h food “stamps” before they buy milk for their kids.
Yonakit profile picture
@jimoc I said the same thing when that’s what a pack of Winston Lights cost.
Oil Can profile picture
LifelongMetsfan1 profile picture
In this “short” article the author tells us that people will stop drinking coco-cola and it’s vast brands including coffee, tea, orange juice, ginger ale, water, sports drinks and alcoholic mixed bottled drinks.
I don’t think so.
No Guilt profile picture

But it’s valued like a fast growing tech stock.

And it’s not growing fast.
NeoContrarian profile picture
"Coca-Cola Appears Vulnerable To A Recession"

Yes, a recession could mean less coca-cola sales at airports, hotels, expensive restaurants, music festivals and outdoor sports events. People will, however, flock to supermarkets to buy their coca-cola. Never bet against caffeine!
No Guilt profile picture

Coffee is the caffeine of choice.

And Coca-Cola is 20-30 years late one that trend.
NeoContrarian profile picture
@No Guilt - I have never, ever witnessed burger bars full of people munching burgers whilst sipping cappuccino. Not sure where you hang out!!!
No Guilt profile picture

Are there more coffee shops, 7-11’s or burger bars?

Morning coffee
Iced coffee
Expresso martinis
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