Recovery of US CSD Market and Higher Coca-Cola Share Would Benefit KO Stock
The Coca-Cola Company (NYSE:KO), which competes with PepsiCo (NYSE:PEP) and Dr Pepper Snapple Group (NYSE:DPS) in the beverage market, is the world’s largest manufacturer, distributor, and marketer of non-alcoholic beverage concentrates and syrups. We currently have a Trefis price estimate of around $60 for Coca Cola’s stock, about 9% above the current market price of around $55.
Trefis members have created forecasts for two key drivers of Coca Cola’s stock over the last week: (1) US Carbonated Soft Drinks Market Size and (2) Coca Cola’s US CSD Market Share. The members’ forecast suggest that US Carbonated Soft Drinks Market Size as well as Coca Cola’s US CSD Market Share will trend higher than the Trefis forecast. These projections suggest a combined upside of around 3% for Coca-Cola’s stock.
The Coca-Cola soft drink brand constitutes around 27% of the $60 Trefis price estimate for the KO stock. Hence the stock is quite sensitive to (1) US Carbonated Soft Drinks Market Size and (2) Coca Cola’s US CSD Market Share. Below are charts showing recent estimates created by Trefis members for the two drivers in detail.
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1. US Carbonated Soft Drinks Market Size
The average of forecasts for US Carbonated Soft Drinks Market Size created by Trefis members indicated a projected increase from around 10 billion in 2010 to 11 billion by the end of the Trefis forecast period, compared to the baseline Trefis estimate of a decrease from 9.3 billion in 2010 to 9.2 billion by the end of the Trefis forecast period. The member estimates imply an upside of 2% to the Trefis price estimate for Coca Cola’s stock. In the past, US Carbonated Soft Drinks Market Size has decreased from around 10 billion in 2005 to 9.4 billion in 2009.
You can drag the forecast trend-line above to express your own view, and see the sensitivity of Coca Cola’s stock to US Carbonated Soft Drinks Market Size.
Our complete analysis for US Carbonated Soft Drinks Market Size is here.
2. Coca Cola’s US CSD Market Share
The average of forecasts for Coca Cola’s US CSD Market Share created by Trefis members indicated a projected increase from around 18% in 2010 to 19% by the end of the Trefis forecast period, compared to the flat Trefis estimate of around 17% over the Trefis forecast period. The member estimates imply an upside of 1% to the Trefis price estimate for Coca Cola’s stock. In the past, Coca Cola’s US CSD Market Share has been in the range of 17-18% from 2005 to 2009.
You can drag the forecast trend-line above to express your own view, and see the sensitivity of Coca Cola’s stock to Coca Cola’s US CSD Market Share.