Is Coca-Cola Stock a Buy, Sell, or Hold in 2025?

Core Viewpoint - Coca-Cola's stock has increased by 17% year-to-date, maintaining a strong performance despite market volatility, attributed to solid business results in 2024 [1][3]. Business Performance - Coca-Cola reported a 6% year-over-year revenue growth in Q4 2024, reaching $11.5 billion, with earnings per share (EPS) rising 12% to $0.51 [3][4]. - The company has shown a consistent trend of rising revenue and EPS since the pandemic lows in 2021 [4]. Growth Strategies - CEO James Quincey highlighted several growth strategies, including enhancing availability, increasing basket incidence, and improving cold drink equipment, which are crucial for driving consumption [6]. - Coca-Cola operates 14 million cold drink units, with plans for expansion, utilizing internet-connected sensors for real-time sales optimization [6]. Free Cash Flow and Dividends - Coca-Cola ended 2024 with strong free cash flow (FCF) of $4.7 billion, which would have been $10.8 billion without tax payments, indicating robust cash availability for investments and dividends [7][8]. - The company has a solid dividend yield of 2.8%, supported by a history of 63 consecutive years of dividend growth, with an estimated FCF of $9.5 billion for 2025 [8][9]. Market Valuation - Coca-Cola's price-to-earnings (P/E) ratio is nearly 30, significantly higher than PepsiCo's ratio of around 21, suggesting that Coca-Cola shares are currently expensive relative to its competitor [15]. - Given the high valuation, it is advised to monitor Coca-Cola stock rather than buy at this time, waiting for a potential price drop [16].