Coca-Cola(KO) 海通国际·2025-01-23 14:47Investment Rating - The report initiates coverage with a NEUTRAL rating for Coca-Cola Co (KO US) [2][113]. Core Views - The global beverage industry leader, Coca-Cola, is experiencing slowing growth with a focus on price increases to drive revenue, particularly in the carbonated beverage segment, which holds a significant market share in the U.S. [3][117]. - The company's dividend yield is currently less attractive compared to U.S. Treasury yields, leading to a decrease in its relative appeal in the global market [5][120]. - Coca-Cola's strategy includes increasing the dividend payout ratio and engaging in share buybacks to enhance shareholder value amid a low-growth environment [4][121]. Summary by Sections Company Overview - Coca-Cola is the largest non-alcoholic beverage company globally, with a strong presence in the carbonated beverage market, holding a 34.8% market share in the U.S. [3][7]. - The company has a long history and has adapted its business model over time, including a shift towards a lighter asset structure and a focus on brand diversification [8][9]. Financial Performance - Revenue for 2023 is reported at $45.75 billion, with a projected growth of 0.8% in 2024 and 3.0% in 2025 [6][109]. - The company has faced challenges due to the divestment of its bottling operations, but recent price increases have positively impacted profitability, with a gross profit margin expected to rise to over 60% by 2025 [3][88]. Dividend and Share Buyback Strategy - Coca-Cola is known as the "king of dividends," with a historical dividend payout ratio increasing from 50.5% to 73.9% over the past years [4][119]. - The company has a share repurchase plan in place, with a remaining quota of 52.83 million shares valued at approximately $3.29 billion [4][119]. Market Position and Competitive Landscape - The carbonated beverage market is characterized by a duopoly, with Coca-Cola and PepsiCo dominating the space [3][52]. - The company is focusing on expanding its product offerings, including low-sugar and non-carbonated beverages, to adapt to changing consumer preferences [59][64]. Future Outlook - The report forecasts a stable growth trajectory for Coca-Cola, with expected revenue reaching $50.01 billion by 2026, driven by strategic pricing and market expansion [6][112]. - The company is positioned to leverage its strong brand portfolio and market presence to navigate the challenges of a mature market [3][61].