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Why Coca-Cola Shares Are Under Pressure

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The Coca-Cola Co (NYSE: KO) will report fourth quarter earnings before the market opens on February 10. Wall Street is expecting EPS of $0.42 on revenue of $10.76 billion.

Over the past month, shares have declined by approximately 4.5 percent as the earnings release approached.

In December, Jefferies maintained a Hold rating, but cut its price target to $40 over concerns related to foreign exchange.

In early January, Morgan Stanley upgraded the stock and set a $47 price target amid strength in “multiple areas, such as its expanding profit margins, reasonable valuation levels and notable return on equity.”

Another development in January was the announcement that the company would cut 1,800 jobs.

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On Monday, Wintergreen Advisers released a list of questions it wants to be addressed on Coca-Cola’s conference call. One of the questions related to the above lay-offs: "How many senior management positions are being eliminated as part of these firings?"

In a press release, Wintergreen Advisers stated: “It's important that shareholders continue to keep the pressure on Coca-Cola to fix its problems and realize the huge value in this great brand. We think the pace of restructuring is still far too slow, management is not being held accountable and the Board of Directors appears content to sail along as if nothing is amiss.

"But change is coming to Coca-Cola, one way or another," they added.

Shares of The Coca-Cola Co were under pressure Monday amid the news from Wintergreen and ahead of Tuesday's earnings release, the stock traded at $41.07, down 0.92 percent.

Latest Ratings for KO

DateFirmActionFromTo
Jun 2017Daiwa CapitalInitiates Coverage OnOutperform
Jun 2017BMO CapitalDowngradesOutperformMarket Perform
Apr 2017Credit SuisseUpgradesNeutralOutperform

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