VALUATION HIGHLIGHTS

1. North America constitutes 36% of the Trefis price estimate for Coca Cola's stock.
2. Latin America constitutes 26% of the Trefis price estimate for Coca Cola's stock.
3. EMEA constitutes 24% of the Trefis price estimate for Coca Cola's stock.

WHAT HAS CHANGED?

Latest Earnings: Q4 and Full Year FY2025

Coca-Cola reported full-year 2025 revenue of $47.1 billion, a 3% increase over the prior year, with organic revenue growth reaching 9%. Full-year comparable EPS grew 7% to $2.88. Performance was primarily driven by robust pricing actions and a 2% increase in concentrate sales, despite significant foreign currency headwinds that impacted reported results by approximately 4%.

Note: Coca-Cola's FY2025 ended on December 31, 2025.

Strategic Focus on Core Brands and Digital Transformation

The company has completed its refranchising of bottling operations in several key emerging markets, shifting toward a more asset-light model. Additionally, Coca-Cola expanded its "Total Beverage Company" strategy by launching new functional wellness beverages and scaling its digital B2B platform, myCoke, which now services over 75% of its global revenue base.

POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE

Below are key drivers of Coca-Cola's value that present opportunities for upside or downside to the current Trefis price estimate:

International Operating Segments

• Emerging Market Volume Growth: Unit case volume in Latin America and Asia Pacific grew by 4% in 2025. If volume growth exceeds the Trefis estimate of 3% due to middle-class expansion, there is a 5-7% upside potential. However, persistent inflationary pressures in these regions could dampen consumer spending.


• Operating Margin Expansion: Through the transition to an asset-light model and digital efficiencies, Coca-Cola's operating margin reached 29.1%. Further expansion toward 30% presents a significant upside, while rising aluminum and sweetener costs remain the primary downside risks.

For additional details, select a division from the interactive Trefis split for Coca-Cola at the top of the page.

BUSINESS SUMMARY

Coca-Cola is the world's largest non-alcoholic beverage company, owning or licensing more than 200 brands. The company operates a global franchise model where it manufactures and sells beverage concentrates and syrups to bottling partners, who then manufacture, package, and distribute the final products to customers.

SOURCES OF VALUE

The company's concentrate business model is its most valuable segment because it generates high margins and requires low capital expenditure.

Unrivaled Global Distribution Network

Coca-Cola's system reaches over 200 countries through a massive network of independent and company-owned bottling partners. This "pervasive penetration" ensures that products are available in millions of retail outlets, creating a barrier to entry that new competitors cannot easily replicate.

Brand Equity and Pricing Power

The Coca-Cola brand consistently ranks as one of the most recognizable in the world. This emotional connection with consumers allows the company to implement price increases to offset inflation without significant volume elasticity, maintaining high cash flow stability across economic cycles.

KEY TRENDS

Health and Wellness Pivot

Consumer preferences are shifting toward low-sugar and functional drinks. Coca-Cola is responding by aggressively expanding its "Aha" sparkling water, "BodyArmor" sports drinks, and "Fairlife" dairy lines. This diversification reduces reliance on sparkling soft drinks and aligns with global sugar-reduction regulations.

Digital Ecosystem Integration

The company is leveraging AI to optimize its supply chain and personalize consumer marketing. Its digital commerce initiatives, including direct-to-consumer pilots and the myCoke B2B platform, are streamlining order processing and inventory management, significantly reducing operational friction for retail partners.

Sustainable Packaging Initiatives

Increased regulatory and consumer focus on plastic waste is driving Coca-Cola toward a "World Without Waste" goal. The company is scaling 100% recycled PET (rPET) bottles across major markets and investing in plant-based packaging, which mitigates long-term ESG regulatory risks and appeals to eco-conscious consumers.