Analysts Conflicted on These Consumer Goods Names: Coca-Cola (KO) and Loblaw Companies (OtherLBLCF)
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 23 2025
0mins
Source: Business Insider
Coca-Cola Analysis: Goldman Sachs analyst Bonnie Herzog maintains a Hold rating on Coca-Cola with a price target of $65.00, while the current consensus is a Strong Buy with an average target of $75.06.
Loblaw Companies Update: CIBC analyst Mark Petrie holds a Buy rating on Loblaw Companies with a price target of C$208.00, and the consensus suggests a Moderate Buy with an average target of C$140.92, indicating a potential upside.
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Analyst Views on KO
Wall Street analysts forecast KO stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for KO is 79.33 USD with a low forecast of 71.00 USD and a high forecast of 85.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
14 Analyst Rating
13 Buy
1 Hold
0 Sell
Strong Buy
Current: 73.060
Low
71.00
Averages
79.33
High
85.00
Current: 73.060
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; Latin America; North America; Asia Pacific; Global Ventures; 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 AdeS. 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.
Coca-Cola's Investment Appeal Analysis
- Significant Brand Advantage: Coca-Cola's strong brand recognition leads consumers to request 'Coke' at restaurants, enhancing brand visibility and ensuring the company maintains its competitive edge in a crowded market, thereby bolstering its long-term profitability.
- Diversified Business Model: By selling both finished products and beverage concentrates, Coca-Cola has established a unique business model that balances higher net operating revenue from finished products with better profit margins from concentrates, allowing the company to stay close to customer preferences across regions.
- Commitment to Shareholder Returns: As a 'Dividend King', Coca-Cola has increased its dividend for over 50 consecutive years, with the latest increase marking the 63rd time, currently paying $2.04 per share with a yield of 2.7%, significantly higher than the S&P 500's 1.1%, reflecting the company's strong commitment to rewarding shareholders.
- Robust Free Cash Flow: Coca-Cola's sustained high levels of free cash flow not only secure ongoing dividend payments but also lay the groundwork for future dividend increases, providing investors with stable returns even during market fluctuations.
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Visa's Dividend Growth Potential Analysis
- Dividend Growth History: Since initiating dividends in August 2008, Visa has increased its payouts by 2,452%, currently distributing $0.67 per share quarterly, which translates to an annual income of $597 for a $1,000 investment back then, highlighting its strong return potential.
- Transaction Volume Growth: Visa anticipates processing $258 billion in transactions for the fiscal year 2025, a 10% increase year-over-year, underscoring its robust position in the payment network and profitability, with the CEO labeling it a 'hyperscaler', suggesting a positive outlook for future dividend growth.
- Cash Flow Coverage: With over $23 billion in operating cash flow and a low payout ratio of 23%, significantly lower than Coca-Cola's 67%, Visa has ample cash available for mergers, acquisitions, or increasing dividends, indicating strong financial health.
- Share Buyback Program: Visa has initiated a $30 billion share buyback program, having already repurchased $4.9 billion in shares in Q4, which reduces the share count and enhances earnings per share, thereby supporting sustainable future dividend growth.
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