KO
DefensiveCoca-Cola Company (The)
Price Chart
Market Data
Financials
XBRL · SEC EDGAR2007–2025(19yr)| Metric | FY 2007 | FY 2008 | FY 2009 | FY 2010 | FY 2011 | FY 2012 | FY 2013 | FY 2014 | FY 2015 | FY 2016 | FY 2017 | FY 2018 | FY 2019 | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 | FY 2025Latest | YoY |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $28.9B | $31.9B | $31.0B | $35.1B | $46.5B | $48.0B | $46.9B | $46.0B | $44.3B | $41.9B | $35.4B | $31.9B | $37.3B | $33.0B | $38.7B | $43.0B | $45.8B | $47.1B | $47.9B | +1.9% |
| Gross Profit | $18.5B | $20.6B | $19.9B | $22.4B | $28.3B | $29.0B | $28.4B | $28.1B | $26.8B | $25.4B | $22.2B | $20.1B | $22.6B | $19.6B | $23.3B | $25.0B | $27.2B | $28.7B | $29.5B | +2.8% |
| Gross Margin | 63.9% | 64.4% | 64.2% | 63.9% | 60.9% | 60.3% | 60.7% | 61.1% | 60.5% | 60.7% | 62.6% | 63.1% | 60.8% | 59.3% | 60.3% | 58.1% | 59.5% | 61.1% | 61.6% | +0.6pp |
| Operating Income | $7.3B | $8.4B | $8.2B | $8.4B | $10.2B | $10.8B | $10.2B | $9.7B | $8.7B | $8.6B | $7.5B | $8.7B | $10.1B | $9.0B | $10.3B | $10.9B | $11.3B | $10.0B | $13.8B | +37.7% |
| Operating Margin | 25.1% | 26.4% | 26.6% | 24.1% | 21.8% | 22.4% | 21.8% | 21.1% | 19.7% | 20.6% | 21.2% | 27.3% | 27.1% | 27.3% | 26.7% | 25.4% | 24.7% | 21.2% | 28.7% | +7.5pp |
| Net Income | $6.0B | $5.8B | $6.8B | $11.8B | $8.6B | $9.0B | $8.6B | $7.1B | $7.4B | $6.5B | $1.2B | $6.4B | $8.9B | $7.7B | $9.8B | $9.5B | $10.7B | $10.6B | $13.1B | +23.3% |
| Net Margin | 20.7% | 18.2% | 22.0% | 33.6% | 18.4% | 18.8% | 18.3% | 15.4% | 16.6% | 15.6% | 3.5% | 20.2% | 23.9% | 23.5% | 25.3% | 22.2% | 23.4% | 22.6% | 27.3% | +4.8pp |
| Free Cash Flow | $5.5B | $5.6B | $6.2B | $7.3B | $6.6B | $7.9B | $8.0B | $8.2B | $8.0B | $6.5B | $5.3B | $6.0B | $8.4B | $8.7B | $11.3B | $9.5B | $9.7B | $4.7B | $5.3B | +11.7% |
| FCF Margin | 19.1% | 17.5% | 20.0% | 20.8% | 14.1% | 16.4% | 17.1% | 17.8% | 18.0% | 15.6% | 15.0% | 18.8% | 22.6% | 26.3% | 29.1% | 22.2% | 21.3% | 10.1% | 11.0% | +1.0pp |
| EPS (Diluted) | $2.57 | $2.49 | $2.93 | $5.06 | $3.69 | $1.97 | $1.90 | $1.60 | $1.67 | $1.49 | $0.29 | $1.50 | $2.07 | $1.79 | $2.25 | $2.19 | $2.47 | $2.46 | $3.04 | +23.6% |
1. THE BIG PICTURE
Coca-Cola is successfully pivoting from a soda giant to a "total beverage company," using its massive global distribution network to scale high-growth categories like Coca-Cola Zero Sugar. However, this transition is occurring against a backdrop of intense financial pressure, where elite profit margins are offset by a heavy debt load and a multi-billion dollar tax dispute that could disrupt its capital allocation strategy.
2. WHERE THE RISKS HIT HARDEST
Coca-Cola Company (The)’s primary competitive strength—its "worldwide network of independent bottling partners" (10-K Item 1)—is simultaneously its most concentrated vulnerability. Coca-Cola’s reliance on these partners is so significant that a single bottler accounted for 10% of net operating revenues in 2025, meaning any financial instability at that partner directly threatens Coca-Cola’s top line (10-K Item 1A). Furthermore, the "Brand Portfolio" strength is being tested by shifting health consciousness; while Trademark Coca-Cola grew 1% in the most recent quarter, the juice, value-added dairy, and plant-based categories saw a 3% decline, suggesting that even a diverse portfolio cannot fully insulate Coca-Cola Company (The) from changing consumer preferences (8-K).
3. WHAT THE NUMBERS SAY TOGETHER
The financial data reveals a striking disconnect between accounting profits and actual cash generation. Coca-Cola leads its peer group in gross margin (61.8%), operating margin (30.1%), and net margin (28.5%), yet it ranks dead last in Free Cash Flow (FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders) margin at just 1.4% (XBRL). This inefficiency is highlighted by a net debt position of $32.4 billion, which represents a staggering 48.3x multiple of its annual FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders (CAPM analysis). While management cites "effective cost management" for margin expansion, the low FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders conversion suggests that capital expenditures or working capital requirements are consuming nearly all the profit Coca-Cola Company (The) records (8-K).
The most recent quarter showed a 2% revenue increase, which is a slight acceleration from the 1.9% TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter growth rate (XBRL). This stability is driven by the 13% growth in Coca-Cola Zero Sugar, which appears to be the structural engine offsetting declines in other categories (8-K).
4. IS IT WORTH IT AT THIS PRICE?
At a Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations of 22.5x, Coca-Cola is trading exactly in line with the peer median of 22.4x (Yahoo Finance). The market is currently pricing in a long-term growth rate of 1.9%, which is consistent with Coca-Cola Company (The)’s current trajectory (CAPM analysis). This valuation is justified by Coca-Cola’s superior margin profile, but it is undermined by its weak FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin (1.4%) compared to PepsiCo (7.7%) and Monster (27.2%).
The primary factor that could force a de-rating is the IRS litigation. If the $3.3 billion tax liability is realized, Coca-Cola Company (The)’s already high leverage would worsen, likely reducing its ability to maintain its 2.6% dividend yield or its 0.3% buyback yield, which is already the lowest among its peers (XBRL). If long-term growth expectations were to slip to 1.5%, the justified multiple would likely contract toward 20x.
5. WHAT WOULD CHANGE THIS VIEW?
- Cautious if the IRS dispute regarding the 2007–2009 tax years results in a final ruling requiring the full $3.3 billion payment plus interest, which would severely strain the balance sheet.
- Constructive if the FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin moves toward the peer median of 7-10%, signaling that Coca-Cola Company (The) has moved past the heavy investment phase of its "innovation hubs" and operational restructuring (8-K).
- Cautious if unit case volume for "Trademark Coca-Cola" turns negative, indicating that the core brand can no longer carry the weight of declining juice and dairy segments.
6. BOTTOM LINE
Structural Advantage: A global distribution system combined with "mandatory incidence pricing" that aligns the financial incentives of independent bottlers with the parent company's growth.
Bottom Line: Coca-Cola is a high-margin defensive play that is currently fairly valued, but it carries significant hidden risks in its tax litigation and poor cash flow conversion.TL;DR
- Coca-Cola dominates the global beverage market with industry-leading profit margins, yet it remains constrained by surprisingly low cash flow conversion compared to its peers.
- A $3.3 billion potential tax liability from a long-running IRS dispute represents a massive, looming threat to Coca-Cola Company (The)’s balance sheet and future cash flows.
- The market is pricing in a long-term growth rate of 1.9%, a modest target that aligns with recent performance but offers little upside if global economic volatility persists.
- Risk Level: Elevated — driven by significant litigation exposure and high net leverage relative to annual free cash flow.
1. THE BIG PICTURE
Coca-Cola is successfully pivoting from a soda giant to a "total beverage company," using its massive global distribution network to scale high-growth categories like Coca-Cola Zero Sugar. However, this transition is occurring against a backdrop of intense financial pressure, where elite profit margins are offset by a heavy debt load and a multi-billion dollar tax dispute that could disrupt its capital allocation strategy.
2. WHERE THE RISKS HIT HARDEST
Coca-Cola Company (The)’s primary competitive strength—its "worldwide network of independent bottling partners" (10-K Item 1)—is simultaneously its most concentrated vulnerability. Coca-Cola’s reliance on these partners is so significant that a single bottler accounted for 10% of net operating revenues in 2025, meaning any financial instability at that partner directly threatens Coca-Cola’s top line (10-K Item 1A). Furthermore, the "Brand Portfolio" strength is being tested by shifting health consciousness; while Trademark Coca-Cola grew 1% in the most recent quarter, the juice, value-added dairy, and plant-based categories saw a 3% decline, suggesting that even a diverse portfolio cannot fully insulate Coca-Cola Company (The) from changing consumer preferences (8-K).
3. WHAT THE NUMBERS SAY TOGETHER
The financial data reveals a striking disconnect between accounting profits and actual cash generation. Coca-Cola leads its peer group in gross margin (61.8%), operating margin (30.1%), and net margin (28.5%), yet it ranks dead last in Free Cash Flow (FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders) margin at just 1.4% (XBRL). This inefficiency is highlighted by a net debt position of $32.4 billion, which represents a staggering 48.3x multiple of its annual FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders (CAPM analysis). While management cites "effective cost management" for margin expansion, the low FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders conversion suggests that capital expenditures or working capital requirements are consuming nearly all the profit Coca-Cola Company (The) records (8-K).
The most recent quarter showed a 2% revenue increase, which is a slight acceleration from the 1.9% TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter growth rate (XBRL). This stability is driven by the 13% growth in Coca-Cola Zero Sugar, which appears to be the structural engine offsetting declines in other categories (8-K).
4. IS IT WORTH IT AT THIS PRICE?
At a Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations of 22.5x, Coca-Cola is trading exactly in line with the peer median of 22.4x (Yahoo Finance). The market is currently pricing in a long-term growth rate of 1.9%, which is consistent with Coca-Cola Company (The)’s current trajectory (CAPM analysis). This valuation is justified by Coca-Cola’s superior margin profile, but it is undermined by its weak FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin (1.4%) compared to PepsiCo (7.7%) and Monster (27.2%).
The primary factor that could force a de-rating is the IRS litigation. If the $3.3 billion tax liability is realized, Coca-Cola Company (The)’s already high leverage would worsen, likely reducing its ability to maintain its 2.6% dividend yield or its 0.3% buyback yield, which is already the lowest among its peers (XBRL). If long-term growth expectations were to slip to 1.5%, the justified multiple would likely contract toward 20x.
5. WHAT WOULD CHANGE THIS VIEW?
- Cautious if the IRS dispute regarding the 2007–2009 tax years results in a final ruling requiring the full $3.3 billion payment plus interest, which would severely strain the balance sheet.
- Constructive if the FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin moves toward the peer median of 7-10%, signaling that Coca-Cola Company (The) has moved past the heavy investment phase of its "innovation hubs" and operational restructuring (8-K).
- Cautious if unit case volume for "Trademark Coca-Cola" turns negative, indicating that the core brand can no longer carry the weight of declining juice and dairy segments.
6. BOTTOM LINE
Structural Advantage: A global distribution system combined with "mandatory incidence pricing" that aligns the financial incentives of independent bottlers with the parent company's growth.
Bottom Line: Coca-Cola is a high-margin defensive play that is currently fairly valued, but it carries significant hidden risks in its tax litigation and poor cash flow conversion.
1. Top 5 Material Risks
- Economic and Geopolitical Volatility: Global inflationary pressures, interest rate changes, and international conflicts threaten to increase costs for energy, packaging, and raw materials while simultaneously reducing consumer purchasing power and demand for products.
- Tax Litigation: The Coca-Cola Company (The) is currently contesting an IRS claim for approximately $3.3 billion in additional U.S. federal income tax for the years 2007–2009, which could materially impact financial position and cash flows if resolved unfavorably.
- Bottler Concentration: A significant portion of net operating revenues is derived from sales of concentrates and syrups to independent bottlers; one such partner accounted for 10% of net operating revenues in 2025, creating exposure to their financial stability and operational decisions.
- Supply Chain and Input Costs: The Coca-Cola Company (The) faces price volatility for ingredients, agricultural commodities, and energy, with inflationary pressures expected to continue impacting the business through 2026.
- Changing Consumer Preferences: Shifts in demand due to health concerns regarding sweetened beverages, obesity, and the perceived impact of ingredients (such as nutritive sweeteners and biotechnology-derived substances) may lead to reduced sales volume and increased regulatory costs.
2. Company-Specific Risks
- Digitalization Execution: The Coca-Cola Company (The) is prioritizing the digitalization of its system using AI and data analytics; failure to successfully integrate these technologies could negatively affect margins and increase operational expenses.
- Productivity Initiatives: Ongoing efforts to optimize the business model may cause management distraction, disrupt operations, or lead to negative publicity and employee morale issues, potentially weakening internal control structures.
- Alcohol Category Expansion: Entering the alcohol beverage category introduces new execution risks, including compliance with complex licensing, trade, and marketing regulations that differ from the core non-alcoholic business.
- Counterparty Risk: The Coca-Cola Company (The) maintains significant cash and derivative positions with financial institutions; insolvency or default by these counterparties could limit the ability to recover assets or settle hedging contracts.
3. Regulatory/Legal Risks
- OECD Pillar One and Two: The Coca-Cola Company (The) is monitoring the implementation of global minimum tax rules; while recent guidance largely exempts U.S.-headquartered companies from Pillar Two, future legislative changes could increase uncertainty regarding net income and cash flow.
- Proposition 65: Compliance with California’s Proposition 65 regarding substance warnings could lead to negative consumer reaction and adverse publicity, impacting sales in California and other markets.
- Environmental Packaging Laws: Increasing global regulations regarding plastic waste, recycling content, and extended producer responsibility may force changes to distribution models and increase capital expenditures.
- Data Privacy Compliance: The Coca-Cola Company (The) is subject to evolving global privacy laws (e.g., GDPR, China’s PIPL); failure to comply could result in significant penalties, regulatory investigations, and mandatory corrective actions.
4. Financial Impact Map
Economic and Geopolitical Volatility → Net Operating Revenues → Reduced consumer demand and potential product boycotts. Tax Litigation → Net Income / Cash Flow → Potential $3.3 billion liability plus interest for 2007–2009 tax years. Bottler Concentration → Net Operating Revenues → 10% of revenue tied to a single bottler; potential loss of equity income if investee bottlers face financial deterioration. Supply Chain and Input Costs → Cost of Goods Sold / Gross Margin → Volatility in commodity, energy, and transportation costs expected to persist through 2026. Changing Consumer Preferences → Net Operating Revenues → Potential volume declines due to health-related concerns and shifts toward private-label brands.
Recent Filings
| Form | Filed | Period |
|---|---|---|
| 10-K | Feb 2026 | Dec 2025 |
| 8-K | Feb 2026 | — |
| 10-Q | Oct 2025 | Sep 2025 |
| 14A | Mar 2025 | — |
AI-extracted key facts from press releases and SEC filings. Significance 1–10.
Coca-Cola increases quarterly dividend 3.9% to $0.53 per share
- ▸Q1 2026 dividend $0.53 per share, +$0.02 increase
- ▸64 consecutive years of annual dividend increases
- ▸Forward annual dividend rate $2.12 per share
- ▸Current dividend yield 2.7%
- ▸Adjusted FCF payout ratio target maintained at 75%
Coca-Cola CEO James Quincey to step down; company pivots to AI-driven digital transformation
- ▸CEO James Quincey to step down as part of leadership transition
- ▸New Chief Digital Officer role created to accelerate AI and digital growth
- ▸Shares trading at $76.27, approximately 9% below analyst consensus target
- ▸Stock shows 6.5% decline over the past 30 days
- ▸Company P/E ratio currently at approximately 25x earnings
Coca-Cola raises quarterly dividend to $0.53, marks 64th consecutive annual increase
- ▸Quarterly dividend increased to $0.53 per share, $2.12 annualized
- ▸64th consecutive annual dividend increase approved by Board
- ▸Repurchased 1.45M shares for $99.8M between Sept and Dec 2025
- ▸Analysts raise price targets to $87–$90 range citing pricing power
- ▸Discontinuing frozen product lines in U.S. and Canada
Coca-Cola faces margin pressure as Strait of Hormuz conflict drives up global logistics costs
- ▸Strait of Hormuz conflict driving global oil prices higher
- ▸Manufacturing and transportation costs rising for Coca-Cola and bottling partners
- ▸EMEA region accounted for 22.6% of 2025 operating revenue
- ▸EMEA region contributed 31.2% of 2025 operating income
- ▸Potential for reduced consumer demand in EMEA due to inflationary pricing
Coca-Cola raises quarterly dividend 3.9% to $0.53/share, marks 64th consecutive annual increase
- ▸Quarterly dividend raised to $0.53 per share from $0.51
- ▸64th consecutive annual dividend increase approved by Board
- ▸Repurchased 2.33M shares for $162.08M between Sept and Dec 2025
- ▸Discontinuing frozen product line in U.S. and Canada markets
- ▸Terminated sale process for Costa Coffee after bids missed expectations