Lower Aluminum Tariffs Could Benefit Coca-Cola and Constellation Brands
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 24 2026
0mins
Source: NASDAQ.COM
- Aluminum Tariff Impact: President Trump is considering lowering tariffs on aluminum cans and steel appliances, which could directly improve margins for Coca-Cola and Constellation Brands, especially as the importance of aluminum packaging increases for their products.
- Coca-Cola's Margin Pressure: While Coca-Cola is not directly affected by aluminum tariffs, rising costs for its bottling partners may lead to increased wholesale prices, impacting Coca-Cola's global sales and margins, forcing it to consider adjusting concentrate prices in response to market changes.
- Constellation Brands' Market Challenges: Nearly 40% of Constellation Brands' beer shipments come in aluminum cans, and if tariffs are not reduced, it will need to raise prices to offset costs, but its pricing power is limited due to declining consumption among younger consumers, creating greater market pressure.
- Strategic Significance: A reduction in aluminum tariffs would enhance market competitiveness for both Coca-Cola and Constellation Brands, potentially attracting more investor interest in their stocks amid current unfavorable economic and consumer trends.
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Analyst Views on KO
Wall Street analysts forecast KO stock price to rise
14 Analyst Rating
13 Buy
1 Hold
0 Sell
Strong Buy
Current: 77.800
Low
71.00
Averages
79.33
High
85.00
Current: 77.800
Low
71.00
Averages
79.33
High
85.00
About KO
The Coca-Cola Company is a beverage company. The Company's segments include Europe, Middle East and Africa (EMEA); Latin America; North America; Asia Pacific, and Bottling Investments. It sells multiple brands across several beverage categories worldwide. Its portfolio of sparkling soft drink brands includes Coca-Cola, Sprite and Fanta. Its water, sports, coffee and tea brands include Dasani, smartwater, vitaminwater, Topo Chico, BODYARMOR, Powerade, Costa, Georgia, Fuze Tea, Gold Peak and Ayataka. Its juice, value-added dairy and plant-based beverage brands include Minute Maid, Simply, innocent, Del Valle, fairlife and Santa Clara. It operates in two lines of business: concentrate operations and finished product operations. Its concentrate operations sell beverage concentrates, syrups, including fountain syrups, and certain finished beverages to authorized bottling operations. Its finished product operations sell sparkling soft drinks and a variety of other finished beverages.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Cost Basis Yield: With a cost basis of $3.25 per share for Coca-Cola and an annual dividend of $2.12, Berkshire enjoys a yield of 65%, while American Express has a cost basis of $8.60 and a dividend of $3.80, yielding 44%, showcasing the substantial financial returns from long-term holdings.
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- Stock Trading Dynamics: The company has been a net seller for the 13th consecutive quarter, primarily raising funds through sales of Apple and Bank of America stocks, reflecting its ongoing focus on these core holdings and risk management strategies.
- Buyback Strategy Adjustment: Although the company has not repurchased shares for six straight quarters, it began buying back stock earlier this month, indicating a reassessment of current stock prices, particularly as the price-to-book ratio has decreased from 1.8 to 1.4.
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See More
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See More
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- Net Stock Selling: During Buffett's last three years, he was a net seller of stocks for 13 consecutive quarters, totaling nearly $187 billion, reflecting his cautious stance on current market valuations, which could lower investor expectations for future earnings.
- No Stock Buybacks: Over the past 19 months, Buffett did not repurchase any of Berkshire's stock despite having $373.3 billion in cash and equivalents, indicating his conservative view on the company's stock valuation, which may affect shareholder returns.
- Successor's Strategy: New CEO Greg Abel commits to continuing Buffett's value investment philosophy, emphasizing share buybacks when stocks trade below intrinsic value, which could create long-term value for shareholders, but short-term market volatility remains a concern.
See More
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- Long-Term Holdings: Berkshire Hathaway has held American Express stock since 1964 and Coca-Cola since 1988, demonstrating the company's long-term trust and strategic vision for these two firms over nearly 40 years.
- Significant Dividend Income: In 2025, Berkshire received $816 million in dividends from Coca-Cola and $479 million from American Express, indicating that these investments are not only stable but also growing, enhancing the company's cash flow and financial flexibility.
- Cost Basis Yield: With a cost basis of $3.25 per share for Coca-Cola and an annual dividend of $2.12, Berkshire enjoys a yield of 65%, while American Express has a cost basis of $8.60 and a dividend of $3.80, yielding 44%, showcasing the substantial financial returns from long-term holdings.
- Strategic Portfolio: New CEO Abel emphasized that Coca-Cola, American Express, Apple, and Moody's are core investments for Berkshire, expected to compound over time, with dividend income providing crucial funding for future acquisitions and operations.
See More
Berkshire Hathaway's Cash Reserves Analysis
- Cash Reserve Status: Berkshire Hathaway ended 2025 with a cash reserve of $373.3 billion, down from $381.6 billion in Q3, yet still demonstrating strong financial strength, indicating the company's resilience amid market fluctuations.
- Stock Trading Dynamics: The company has been a net seller for the 13th consecutive quarter, primarily raising funds through sales of Apple and Bank of America stocks, reflecting its ongoing focus on these core holdings and risk management strategies.
- Buyback Strategy Adjustment: Although the company has not repurchased shares for six straight quarters, it began buying back stock earlier this month, indicating a reassessment of current stock prices, particularly as the price-to-book ratio has decreased from 1.8 to 1.4.
- CEO Strategic Outlook: New CEO Abel emphasized patience in managing the cash reserves in his annual letter, stating the need for disciplined investment timing while also highlighting the importance of risk management beyond its large insurance operations.
See More
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- Cash Reserve Status: Berkshire ended 2025 with a cash reserve of $373.3 billion, down from $381.6 billion in Q3, yet still demonstrating strong financial strength that allows for flexibility in future investment opportunities.
- Stock Trading Strategy: The company has been a net seller for the 13th consecutive quarter, primarily raising funds through sales of Apple and Bank of America stocks, indicating a cautious approach to these holdings, while Apple remains its largest investment, reflecting stability in its long-term investment strategy.
- Stock Buyback Decision: Berkshire has not repurchased any shares for six consecutive quarters, although it has recently begun to reconsider its buyback strategy, indicating a more cautious approach to assessing the intrinsic value of its stock, especially with the current P/B ratio at 1.4.
- Impact of Management Changes: New CEO Abel emphasizes the importance of patience and risk management, and while investors express frustration over the company's inaction, he believes that maintaining discipline and a prudent investment strategy is wise in a rapidly evolving technological landscape.
See More
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- Coca-Cola's Steady Growth: Coca-Cola continues to expand in the global beverage market, successfully increasing sales of bottled water, juices, and sports drinks despite declining soda consumption, with projected EPS growth of 6.6% CAGR from 2025 to 2028.
- Altria's Business Transformation: Altria accelerates its shift towards smoke-free products through the acquisition of e-cigarette leader NJOY, expecting smoke-free revenue to reach at least $5 billion by 2028, which would account for a quarter of its projected sales, demonstrating adaptability to future market trends.
- Dividend King Status: Both Coca-Cola and Altria are Dividend Kings, with Coca-Cola raising dividends for 64 consecutive years at a yield of 2.65%, while Altria has increased dividends 60 times over 56 years, boasting a yield of 6.25%, showcasing strong dividend performance from both companies.
- Valuation and Investment Choice: Coca-Cola's forward P/E ratio stands at 24, while Altria's is lower at 12, making Altria more attractive in the current market environment due to its lower valuation and higher dividend yield, especially in light of its expanding smoke-free business.
See More
Consumer Stocks Defy Market Trends with Gains
- Coca-Cola Consolidated Performance: Coca-Cola Consolidated's stock surged 51% over the past year, reaching a market cap of $14 billion, and despite revenue growth not exceeding 12%, it has achieved 16 consecutive years of positive growth, indicating its stable market performance and long-term investment value.
- McDonald's Product Innovation: McDonald's launched the limited-time Big Arch, and despite controversy surrounding the CEO's tasting video, the company achieved a net margin of 27% in 2025, with expectations to increase dividends, solidifying its status as a 'Dividend King'.
- Restaurant Brands International Growth: Restaurant Brands International boasts a market cap of $26 billion, and while smaller than McDonald's, it achieved a 12% revenue growth rate in 2025 and offers a 3.5% dividend yield, showcasing its attractiveness in a competitive market.
- Defensive Consumer Trends: Amid economic uncertainty, oil, gas, and defense sectors performed strongly, while consumer companies like Coca-Cola, McDonald's, and Restaurant Brands International reached new stock highs, reflecting market confidence and demand for these brands.
See More
Buffett's Retirement Marks Shift in Berkshire's Investment Strategy
- Buffett's Retirement: Warren Buffett officially retired on December 31, 2025, concluding his six-decade tenure as CEO of Berkshire Hathaway, although he remains chairman, which may impact the company's investment decisions and market confidence.
- Net Stock Selling: During Buffett's last three years, he was a net seller of stocks for 13 consecutive quarters, totaling nearly $187 billion, reflecting his cautious stance on current market valuations, which could lower investor expectations for future earnings.
- No Stock Buybacks: Over the past 19 months, Buffett did not repurchase any of Berkshire's stock despite having $373.3 billion in cash and equivalents, indicating his conservative view on the company's stock valuation, which may affect shareholder returns.
- Successor's Strategy: New CEO Greg Abel commits to continuing Buffett's value investment philosophy, emphasizing share buybacks when stocks trade below intrinsic value, which could create long-term value for shareholders, but short-term market volatility remains a concern.
See More
