Coca-Cola’s better-than-expected first-quarter earnings on Tuesday have reinforced investor confidence in its global, diversified strategy amid market volatility and trade concerns.
In a subdued earnings season, revenue reached $11.22 billion, narrowly topping Wall Street’s estimate of $11.14 billion, while earnings per share came in at 73 cents, just above the projected 71 cents.
The beverage company’s performance came as a contrast to peer PepsiCo, which has trimmed its full-year forecast, citing macroeconomic pressures.
Coca-Cola, on the other hand, reaffirmed its guidance for 2025, forecasting organic revenue growth of 5% to 6% and comparable earnings per share growth of 2% to 3%.
“Despite some pressure in key developed markets, the power of our global footprint allowed us to successfully navigate a complex external environment,” said CEO James Quincey.
This resilience comes at a time when broader consumer sentiment in the US remains soft.
The company’s relative earnings stability, greater international exposure, and high dividend yield are attracting fund flows in the current environment, wrote Garrett Nelson, senior equity analyst at CFRA Research.
Tariffs pose new tests in the second quarter
Heading into the next quarter, Coca-Cola warned of potential short-term “choppiness” due to trade conflicts.
While last year’s second quarter marked a particularly strong period, making year-over-year comparisons difficult, the company remains cautiously optimistic.
“We’re monitoring the tariff environment closely,” Quincey said, noting that while localized operations provide a buffer, supply chain inputs remain globally exposed.
Analysts believe any impact will likely be temporary and manageable. According to data compiled by LSEG, the average recommendation of 28 brokerages is “buy”, with a median price target being $78.
Analysts stay bullish despite tariff-related risks
Despite fresh trade tensions sparked by tariffs proposed by former President Donald Trump, Coca-Cola has not revised its outlook, although it did caution that certain input costs, such as aluminum and orange juice, could rise.
“Our operations are primarily local,” the company said in its earnings statement, but it acknowledged some volatility ahead, particularly in the US.
Still, analysts are broadly supportive of the company’s ability to manage these risks.
Kevin Grundy, senior research analyst at BNP Paribas Exane, said on Tuesday, “Earnings season has given investors little to get excited about… In contrast, Coca-Cola continues to hit on all cylinders and stands out fundamentally within the group.”
He reiterated Coca-Cola as his top pick.
RBC Capital Markets echoed that view, citing Coca-Cola’s advanced Revenue Growth Management (RGM) capabilities, including varied pack sizes that help maintain affordability while preserving margins.
RBC expects these tools to support performance into 2025. The brokerage rated the company “outperform”, with a price target of $76. The stock is currently trading at $73.
Piper Sandler said KO has tailwinds from strong industry growth, competitive advantages for gaining market share, an “all-weather” approach for all beverage occasions, and marketing focused on consumers and customers.
It has an “overweight” rating on the stock, with a PT of $80.
Jefferies noted that Coca-Cola’s recent final payment for dairy brand Fairlife would boost free cash flow into next year, strengthening its balance sheet further.
“Coca-Cola continues to manage and adapt through the more challenging operating environment,” Jefferies added, giving a price target of $83 with a ‘buy” rating.
ETFs with high Coca-Cola exposure gain interest
With Coca-Cola outperforming both its peers and broader benchmarks, analysts recommend investors could consider exchange-traded funds (ETFs) with significant KO weightings.
These include iShares U.S. Consumer Staples ETF (IYK), Vanguard Consumer Staples ETF (VDC), Fidelity Covington Trust MSCI Consumer Staples Index ETF (FSTA), and First Trust Nasdaq Food & Beverage ETF (FTXG).
Coca-Cola comprises between 8% and 11% of these ETFs, offering a diversified way for investors to gain exposure to the beverage giant’s momentum.
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