Buy, Sell, Or Hold KO Stock At $68?

Core Viewpoint - Coca-Cola's Q4 earnings exceeded market expectations, with revenue of $11.5 billion and adjusted earnings of $0.55 per share, driven by stronger pricing and a positive outlook for 2025 [1][3][4] Financial Performance - Coca-Cola reported a 6% year-over-year increase in revenue on a reported basis, while organic revenue grew by 14%, supported by a 9% increase in price/mix and a 5% rise in concentrate sales [3][4] - Q4 volume increased by 2%, and the operating margin improved by 90 basis points year-over-year to reach 24% [4] - Net earnings rose by 12% to $0.55 per share, with expectations for organic sales growth between 5% and 6% and bottom line growth between 2% and 3% [4] Stock Performance - Following the earnings report, Coca-Cola's stock rose by 5%, reflecting solid Q4 performance and guidance that met market expectations [1][5] - Since the start of 2024, KO stock has risen 13%, underperforming the S&P 500's 27% gain, attributed to a slowdown in volume growth [2][5] - KO trades at approximately $68 per share, at 23 times trailing earnings of $2.88 per share, below its five-year average P/E ratio of 25x, indicating potential for growth [7] Market Outlook - Despite recent challenges, Coca-Cola's management reassured investors about manageable impacts from potential metal import tariffs, as packaging costs constitute a small portion of expenses [4][7] - The company is viewed as an attractive long-term investment due to strong volume growth, improving margins, and limited impact from aluminum tariffs [7]