Coca-Cola
Dow component and Warren Buffett favorite Coca-Cola Co. (NYSE: KO) has posted a share price decline of about 3% over the past 12 months. For the year to date, the stock is down about 7%, worse than the consumer staples sector’s decline of around 3% for the same period.
PepsiCo’s outstanding report earlier this week has not had a positive effect on Coca-Cola’s stock, and that is something of a mystery. Demand appears to be strong, and both firms have been able to raise prices to cover higher costs. The big differences between the two are PepsiCo’s snack food business, and Coke’s reliance on the global soft drinks market is about twice that of Pepsi’s.
Analysts are bullish on the stock, with 19 of 26 of them having a Buy or Strong Buy rating. The other seven have Hold ratings. At a share price of around $60.00, the upside potential based on a median price target of $68.00 is 13.3%. At the high price target of $77.00, the upside potential is 28.3%.
Fourth-quarter revenue is forecast at $9.92 billion, down 10.6% sequentially but up 4.8% year over year. Adjusted EPS are pegged at $0.45, down 35% sequentially and flat year over year. For the full 2022 fiscal year, consensus estimates call for EPS of $2.49, up 7.4%, on revenue of $42.8 billion, up 10.7%.
Coca-Cola stock trades at 23.9 times expected 2022 EPS, 23.3 times estimated 2023 earnings of $2.56 and 21.5 times estimated 2024 earnings of $2.78 per share. The stock’s 52-week range is $52.28 to $67.20. Coca-Cola pays an annual dividend of $1.76 (yield of 2.95%). Total shareholder return for the past year was negative 0.09%.
Peabody Energy
Since posting a 52-week low some 50 weeks ago, the stock price of Peabody Energy Corp. (NYSE: BTU) rose to a 52-week high 130% higher by mid-April. Since then, the shares have dropped by nearly 23% but still show a 12-month gain of about 71%. Coal prices are down by about a fifth since last April and by more than 50% since the November peak. According to the International Energy Agency (IEA), coal demand rose to more than 8 billion metric tons in 2022, and the agency believes demand will remain flat through 2025.
Only four brokerages cover the stock, and three of them have Buy ratings. The fourth has a Hold rating. At a share price of around $26.00, the upside potential based on a median price target of $33.50 is 28.8%. At the high price target of $39.00, the upside potential is 50%.
Fourth-quarter revenue is forecast at $1.37 billion, up about 2% sequentially and 8.7% higher year over year. Adjusted EPS are pegged at $1.93, about flat sequentially and down 44.2% year over year. For the full 2022 fiscal year, consensus estimates call for EPS of $6.10, down 7.5%, on revenue of $4.72 billion, up 42.4%.
Peabody stock trades at 4.2 times expected 2022 earnings, 3.7 times estimated 2023 earnings of $6.94 and 15.2 times estimated 2024 earnings of $1.70 per share. The stock’s 52-week range is $14.34 to $33.29. The company does not pay a dividend. Total shareholder return for the past year was 73.3%.
Originally published at 24/7 Wall St.
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