Coca-Cola (KO) Upgraded to Buy: Here's Why

Core Viewpoint - Coca-Cola (KO) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on the consensus measure of EPS estimates from sell-side analysts, reflecting the company's changing earnings picture [1][2]. - Changes in earnings estimates are strongly correlated with near-term stock price movements, influenced by institutional investors who adjust their valuations based on these estimates [4]. Business Outlook - The upgrade in Coca-Cola's rating suggests an improvement in the company's underlying business, which is expected to lead to higher stock prices as investors respond positively [5][10]. - For the fiscal year ending December 2025, Coca-Cola is projected to earn $2.97 per share, with a 0.3% increase in the Zacks Consensus Estimate over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks which have averaged a +25% annual return since 1988 [7]. - Coca-Cola's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10].