Does Coca-Cola’s stock price offer investment appeal?

Can The Coca-Cola Co (NYSE:KO) generate impressive stock price returns?

Coca-Cola
Coca-Cola

The Coca-Cola Co (NYSE:KO) stock price has failed to rise in the last year. Investor sentiment towards the beverages company has been relatively downbeat, with the wider index delivering superior performance versus the consumer goods major.

In my view, though, the prospects for the stock remain encouraging. The refranchising of its bottling plants has the potential to cut costs and provide the business with increased capital. This could be used for acquisitions, as well as to focus to a greater extent on transforming its existing brands.

With consumers focused on healthier options, Coca-Cola is seeking to diversify its product range away from sugary drinks, and also away from ingredients that are viewed as unnatural by consumers. This could prove to be a solid strategy in my view, and may represent a less risk-averse attitude as the company seeks to become more nimble and adaptive than it has been in the past.

The business is also seeking to become faster at responding to different growth opportunities across the world. It is seeking to quickly transplant successful brands in one region into its other regions in a short space of time. This could allow it to capitalize on changing consumer tastes faster than it has done in the past, and may lead to higher sales and profitability in future years.

Further, Coca-Cola is seeking to adapt to changing consumer tastes through smaller portion sizes. This also improves its overall margin and profitability, while a focus on marketing higher-margin products could also lead to an improving bottom line over the coming years.

Therefore, while the last year has been a disappointment for its investors, I’m upbeat about the stock’s future prospects. It seems to offer an improving strategy which could prove to be successful in what remains a fast-changing consumer goods industry across the globe.








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Robert Stephens is a CFA Charterholder and works as an Equity Analyst. He is a keen private investor and has bought and sold stocks for 15 years, investing in a range of sectors and markets. He has previously written for Seeking Alpha and The Motley Fool, and now runs his own business. If you would like to contact Robert, please email [email protected] or contact him via one of the other methods on the 'Contact Us' page