Cramer And This Technical Analyst Agree: Coca-Cola Has Room To Run

Coca-Cola Co KO saw its shares hit a new 52-week high Tuesday in reaction to its second-quarter results but the stock still has "a lot more room to run," says CNBC's Jim Cramer.

Cramer: Throwback To The 1980s

Coca-Cola's era of growth started in the 1980s when the U.S. economy shifted towards the post-industrial stage and culminated in a "great bull market," Cramer said Tuesday evening. Coca-Cola's earnings report signals the current environment is similar to the growth era last seen decades ago.

Coca-Cola under the leadership of CEO James Quincey proved it's "back and back big," Cramer said. The company showed 6% organic grow in a lot of its businesses, including secular growth in emerging markets and the highest volume growth in a decade.

Backed by a dividend yield of around 3% and a commitment to buyback a lot of its own stock, Cramer said it "might as well be 1985."

Technical Analyst: 'Always' Buy At The Highs

Coca-Cola's stock hitting new highs shouldn't deter investors from buying shares as the stock is playing some catchup after lagging major indices over the past five years. In fact, taking a much longer timeframe, Coca-Cola's stock traded at similar levels in early 2019 as it did in 1998, Mark Newton, president and founder of Newton Advisors, said during a CNBC "Trading Nation" segment.

Breaking above a 20-year base is a "very bullish" indication for Coca-Cola's stock and on an intermediate-term basis shares should start to outperform, Newton said.

"I think it's finally time to have a Coke and a smile," he said. "It's right to bet on this stock, and near term and intermediate term, it likely can show some good outperformance."

Coca-Cola's stock traded around $54.78 per share at time of publication.

Related Links:

Morgan Stanley: Coca-Cola 'Clearly' Boasts Better Growth

Morgan Stanley's Beverage Pair Trade: Overweight Coca-Cola, Underweight Keurig Dr Pepper

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Date
ticker
name
Actual EPS
EPS Surprise
Actual Rev
Rev Surprise
Posted In: Analyst ColorEarningsLong IdeasNewsAnalyst RatingsMediaTrading IdeasbeveragesCNBCJames QuinceyJim CramerMad MoneyMark NewtonTrading Nation
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!