PreMarket Prep Stock Of The Day: Coca-Cola

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

Earnings were the primary focus of Wednesday's PreMarket Prep Show. One of those companies that surprised to the upside was stodgy Coca-Cola Co. KO.

Rough Start To The Year And Rebound: While the S&P 500 was weak to start the year, falling 1%, Coca-Cola fared much worse. After ending 2020 at $54.84, the issue swooned to end January at $48.15 for a 12% decline.

However, it put in place a double bottom in February just above the $48 level and posted four winning months in a row, ending May just above its year-end close at $55.29. It took a breather in June falling to $54.11 but has followed the index higher in July. In fact, earlier in Wednesday’s session, it reached its highest level ($57.56) since March 2020, when it peaked at $59.

See Also: 5 Most Unusual Coca-Cola Beverage Experiments

Recent Price Action: Coca-Cola hasn't been immune to the recent volatility in the S&P 500 index. Following making a new high for its recent rebound last Friday, it followed the market lower on Monday to $55.16 and rebounded to close at $55.73. It didn't fully participate in Tuesday’s rally, only adding a dime to close at $55.83.

It should be noted that during Tuesday’s session, it was able to match Monday’s high ($56.35), but couldn't hold that level into the close.

Q2 Beat: Before the open, Coca-Cola reported quarterly earnings of 68 cents per share, which beat the analyst consensus estimate by 13 cents. This is a 61.9% increase from the same period last year. The company reported quarterly sales of $10.10 billion, which beat the analyst consensus estimate of $9.25 billion. This is a 41.26% increase from the same period last year.

PreMarket Prep Take On Price Action: When the issue was covered on the show, it was trading at the $57.30 area (nearly higher by $1.50) and had already put in place the premarket high ($57.70). Both hosts were skeptical the issue could improve on or even hold on to the huge gains.

Dennis Dick commented that Coca-Cola isn't a huge mover and most of the time it doesn't even move more than $1 in a day. As a result, he had no intention of going long the issue at this elevated price. The author of this article was confident the premarket high wouldn't be reached and suggested investors looking to exit the issue would need to choose a price ahead of the premarket high.

The full discussion on Coca-Cola from Wednesday’s show can be found here:

Price Action During The Regular Session: After a much higher open, the issue continued higher but stalled ahead of the premarket high, only reaching $57.56 and sharply reversed course.

As of 2:30 p.m. EST, the issue eclipsed Tuesday’s range ($56.33), reaching $56.67.