Berkshire Hathaway's Uncertain Future Post-Buffett Retirement
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Should l Buy KO?
Source: Fool
- Long-Term Investment Returns: Over the past 20 years, Berkshire Hathaway's stock has surged 756%, outperforming the S&P 500's 456% increase, yet its stock only rose 6% in the last 12 months compared to the S&P 500's 16%, indicating market uncertainty about its future.
- Management Transition Impact: With Warren Buffett set to retire in 2025, successor Greg Abel, who previously led Berkshire Hathaway Energy, lacks Buffett's stock-picking experience, potentially diminishing investor confidence and affecting stock performance.
- Coca-Cola Investment Advantage: Berkshire still holds 400 million shares of Coca-Cola, valued at $31.2 billion and representing 9.5% of its portfolio, while Coca-Cola's straightforward business model and 61.55% gross margin make it a more attractive investment, especially given Berkshire's lack of dividends.
- Coca-Cola's Growth Outlook: Despite declining beverage consumption, Coca-Cola expects organic revenue to rise 5%-6% in 2025, with analysts forecasting adjusted EPS growth of 4% in 2025 and 8% in 2026, demonstrating its stability and growth potential in a volatile market.
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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: 79.030
Low
71.00
Averages
79.33
High
85.00
Current: 79.030
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.
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- Performance Review: In the most recent quarter, Coca-Cola posted EPS of 82 cents, exceeding the consensus estimate of 78 cents, while revenue of $12.46 billion surpassed the $12.39 billion estimate, showcasing strong performance in a competitive landscape.
- Same-Store Sales Growth: Investors should monitor same-store sales growth, particularly with Costco's recent switch back to Coca-Cola products, which may signal a resurgence in brand strength and further enhance market share.
- Analyst Rating Update: Wells Fargo analyst Chris Carey maintained an Overweight rating on Coca-Cola and raised the price target from $79 to $87, reflecting confidence in the upcoming earnings report, which could positively impact the stock price.
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- Long-Term Investment Returns: Over the past 20 years, Berkshire Hathaway's stock has surged 756%, outperforming the S&P 500's 456% increase, yet its stock only rose 6% in the last 12 months compared to the S&P 500's 16%, indicating market uncertainty about its future.
- Management Transition Impact: With Warren Buffett set to retire in 2025, successor Greg Abel, who previously led Berkshire Hathaway Energy, lacks Buffett's stock-picking experience, potentially diminishing investor confidence and affecting stock performance.
- Coca-Cola Investment Advantage: Berkshire still holds 400 million shares of Coca-Cola, valued at $31.2 billion and representing 9.5% of its portfolio, while Coca-Cola's straightforward business model and 61.55% gross margin make it a more attractive investment, especially given Berkshire's lack of dividends.
- Coca-Cola's Growth Outlook: Despite declining beverage consumption, Coca-Cola expects organic revenue to rise 5%-6% in 2025, with analysts forecasting adjusted EPS growth of 4% in 2025 and 8% in 2026, demonstrating its stability and growth potential in a volatile market.
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- Earnings Expectations: Coca-Cola is expected to report earnings per share of 56 cents on revenue of $12.03 billion, having beaten EPS estimates in the last four quarters, indicating sustained profitability and market confidence.
- Performance Review: In the most recent quarter, Coca-Cola posted EPS of 82 cents, exceeding the consensus estimate of 78 cents, while revenue of $12.46 billion surpassed the $12.39 billion estimate, showcasing strong performance in a competitive landscape.
- Same-Store Sales Growth: Investors should monitor same-store sales growth, particularly with Costco's recent switch back to Coca-Cola products, which may signal a resurgence in brand strength and further enhance market share.
- Analyst Rating Update: Wells Fargo analyst Chris Carey maintained an Overweight rating on Coca-Cola and raised the price target from $79 to $87, reflecting confidence in the upcoming earnings report, which could positively impact the stock price.
See More
Coca-Cola Anticipates Consistent Growth, with Coke Zero Taking Center Stage.
Earnings Report: Coca-Cola is scheduled to report its fourth-quarter earnings on Tuesday before the market opens.
Investor Focus: Investors are keen to see if Coca-Cola can maintain steady growth amidst challenges like inflation and tariffs.
Consumer Trends: The company is adapting to changing consumer preferences, particularly the shift from sugary sodas to zero-sugar and functional beverages.
Market Position: Coca-Cola is considered one of the market's most reliable defensive stocks, making its performance particularly noteworthy for investors.
See More
Berkshire Hathaway's Uncertain Future Post-Buffett Retirement
- Long-Term Investment Returns: Over the past 20 years, Berkshire Hathaway's stock has surged 756%, outperforming the S&P 500's 456% increase, yet its stock only rose 6% in the last 12 months compared to the S&P 500's 16%, indicating market uncertainty about its future.
- Management Transition Impact: With Warren Buffett set to retire in 2025, successor Greg Abel, who previously led Berkshire Hathaway Energy, lacks Buffett's stock-picking experience, potentially diminishing investor confidence and affecting stock performance.
- Coca-Cola Investment Advantage: Berkshire still holds 400 million shares of Coca-Cola, valued at $31.2 billion and representing 9.5% of its portfolio, while Coca-Cola's straightforward business model and 61.55% gross margin make it a more attractive investment, especially given Berkshire's lack of dividends.
- Coca-Cola's Growth Outlook: Despite declining beverage consumption, Coca-Cola expects organic revenue to rise 5%-6% in 2025, with analysts forecasting adjusted EPS growth of 4% in 2025 and 8% in 2026, demonstrating its stability and growth potential in a volatile market.
See More
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- Market Performance Rebound: The S&P 500 rose approximately 0.5%, the Nasdaq increased by 1%, and the Dow Jones Industrial Average held above 50,000, indicating a positive market sentiment and a recovery in investor confidence.
- Strong Tech Stock Recovery: The portfolio's Magnificent Seven stocks, including Alphabet, Microsoft, Nvidia, and Meta, rebounded after recent declines, suggesting renewed confidence in the tech sector that could drive future investment inflows.
- Rising Capital Expenditure Expectations: Bank of America's updated capex tracker revealed a 14% quarter-over-quarter and 66% year-over-year increase in global hyperscale capex to $148 billion in Q4, exceeding expectations by $7 billion, reflecting optimism for future investments.
- Upcoming Earnings Reports: On Semiconductor and Vornado Realty Trust are set to release earnings after the bell, with the market closely watching these reports to assess industry health, while several companies, including Coca-Cola and Spotify, will report before Tuesday's open, further influencing market sentiment.
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See More
Consumer Staples Appear Expensive: Explore Clorox and Other High-Yield Stocks with Strong Dividends.
- Market Shift: There is a significant rotation from software stocks to safer investments like consumer staples.
- Investor Sentiment: Investors are concerned that advancements in AI, such as ChatGPT, may negatively impact service-oriented businesses while benefiting manufacturers of household products.
See More
