Morgan Stanley Initiates KO With An EW Rating

Morgan Stanley is initiating coverage of Coca-Cola Company

with an EW rating. “We view KO as well positioned fundamentally, as it offers long-term growth at the high end of staples peers, given solid beverage category growth and strong competitive positioning,” Morgan Stanley writes. “We also believe KO has solid near-term EPS visibility reflected in our slightly (1%) above-consensus 2011-12e EPS, likely due to our more constructive view on accretion from the recent bottling acquisition, given potential synergy upside and rebounding US macros.” However, Morgan Stanley adds that it believes Coke's stock already prices in a robust outlook after a 31% rise since July 1, during which time it outperformed Pepsi by 24% and the S&P 500 by 9%. Coca-Cola Company closed Tuesday at $63.87.