Morgan Stanley Expects Muted Q3 EPS For The Coca-Cola Company

In a report published Monday, Morgan Stanley analyst Dara Mohsenian reiterated an Equal-Weight rating on

. In the report, Morgan Stanley noted, “KO reports Q3 EPS tomorrow, and we are at $0.50, 3c below consensus, driven by +1.9% volume growth (consensus at ~2-2.5%). While we are expecting another weak quarter and are -3% below consensus EPS for FY15, the market is more focused on self-help. Net, the key point with Q3 will probably be if/the scope of a potential new cost-cutting program. We believe the market expects a new $500M-$1B per annum cost-cutting program (lasting 3 years), although we expect savings to be towards the lower end of this range. While this (and other self-help drivers below) would clearly be positives, we believe they are already priced into KO's stock, with KO outperforming meg-cap peers by nearly 600 bps since its 2/20 low (although only 40 bps YTD) despite weaker than expected results.” The Coca-Cola Company closed on Friday at $42.88.