Hold KO at ~$87 with 25-33% starter add to break four-cycle "patience without re-engagement" failure; tiered adds at $84.50-$85.50 and $82.00-$82.85 reserved for confirmed weakness
HOLD with 25-33% starter add at current levels (~$87) represents explicit reform of the execution framework—the prior four HOLDs produced -0.2% to +0.0% alpha because tiered pullback orders at $86.40, $85-86, $84.50-$85.50, and $82-$82.85 never filled as the stock drifted upward rather than pulling back. The 2026-08-13 validated lesson: for a 0.34-beta quality compounder with Berkshire sponsorship, a tiered framework anchored to 'if it dips, I'll buy' is structurally self-defeating—commit to a smaller starter position within 0.5% of spot at the time of the HOLD, or accept that the role of this rating is to defer until price actually reaches the zone. This decision commits to that fractional deployment; full rejection of Aggressive Analyst's full add (weak ~1.97-to-1 R/R given 26x trailing P/E at all-time-high resistance with negative MACD) and Conservative Analyst's rigid pullback-only waiting (zero alpha across four cycles).
| Position | Action |
|---|---|
| Current levels (~$87) | 25-33% starter add |
| At or below $90.60-$90.92 on volume confirmation | Trim 10-15% |
| Benchmark weight or modestly below | Maintain position |
KO is a rare scarcity asset with unmatched brand moat, 60+ years of dividend growth, and a coiled-spring technical setup that makes any dip a high-probability buying opportunity into a fundamentally inflecting business.
| Indicator | Value | Signal |
|---|---|---|
| 10 EMA | $86.89 | bullish |
| 50 SMA | $83.30 | bullish |
| 200 SMA | $76.31 | bullish |
| RSI(14) | 61.88 | neutral |
| MACD Line | 1.22 | neutral |
| MACD Signal | 1.28 | neutral |
| MACD Histogram | -0.06 | bearish |
| Bollinger Upper | $90.85 | neutral |
| Bollinger Mid | $85.83 | neutral |
| Bollinger Lower | $80.81 | neutral |
| ATR(14) | $1.59 |
This report is AI-generated for informational and educational purposes only and is not investment advice or a recommendation to buy or sell any security. Full disclaimer.
When: $84.50-$85.50 zone
Then: Tiered add for confirmed weakness only
EV: +$95+ target (from ~$87 consolidation) · concedes: PEP trades at a lower multiple and offers higher yield today; FCF of $5.3B vs $8.8B dividends is a real number that needs monitoring; Zacks framed valuation as 'Justified OR Overstretched?' - the premium is a real discussion point
KO is a valuation trap at all-time highs with deteriorating fundamentals (FCF coverage failing for two consecutive years, 59% decline in buybacks), extreme multiples (4.18 PEG, 26.34x P/E) pricing in perfection, and structural headwinds from GLP-1 drugs threatening core CSD volume — making the risk/reward unfavorable at current prices.
EV: -$5.3% to -$8.3% · concedes: KO is a great company with a strong brand; The dividend has been raised for 60+ years; The quality will still be there at $80
→ vs conservative: Trimming 15-20% at $90 means selling into the breakout the technicals are telegraphing—locking in gains at the exact moment consolidation is resolving higher
→ vs neutral: The 'wait for a trigger' framing is precisely how investors underperform; KO has already given the trigger with the July 28th breakout, and waiting means watching a $377B mega-cap grind toward $95 without participating
| Volume (08-14) | 5,877,252 | neutral |
Support: 86.4 · 85.83 · 83.3 · 80.81 | Resistance: 89.08 · 90.92 · 90.85
KO is in a confirmed long-term uptrend with all three moving averages stacked bullishly (10 EMA > 50 SMA > 200 SMA), price sitting above each of them. A sharp gap-up breakout on 2026-07-28 (from $84.07 to $88.27, +5%) drove the stock to fresh highs near $89.08, after which it has been digesting gains in a tight $86.40–$87.70 consolidation for ~12 sessions. Volatility is contracting (ATR declining from $2.05 to $1.59) and momentum is mildly weakening (MACD histogram just turned negative at -0.06), but the structural trend remains intact. For position holders: HOLD with stops at $85.80. For new entrants: WAIT for either a breakout above $88.50 on volume ≥15M or a pullback to the 50 SMA at $83.30 for higher-conviction entries.
Market Cap
$377.38 B
P/E (TTM)
26.34x
Forward P/E
24.87x
PEG Ratio
4.18
Price to Book
10.44x
EPS (TTM)
$3.33
Forward EPS
$3.53
Dividend Yield
2.43%
Beta
0.342
52-Week High
$90.92
52-Week Low
$65.35
50-Day Average
$83.19
200-Day Average
$76.89
Revenue (TTM)
$50.13 B
Gross Profit (TTM)
$31.02 B
Gross Margin
61.9%
EBITDA (TTM)
$16.998 B
EBITDA Margin
33.9%
Operating Margin
34.87%
Net Income (TTM)
$14.32 B
Profit Margin
28.56%
ROE (TTM)
42.05%
ROA (TTM)
9.40%
Free Cash Flow (TTM)
$5.22 B
Revenue (2025)
$47,941 M
Gross Profit (2025)
$29,544 M
Operating Income (2025)
$14,911 M
Net Income (2025)
$13,107 M
EBITDA (2025)
$18,702 M
Diluted EPS (2025)
$3.04
Effective Tax Rate (2025)
17.9%
Revenue CAGR (2021-2025)
5.5%
EPS CAGR (2021-2025)
8.4%
Total Assets (2025)
$104,816 M
Total Debt (2025)
$45,492 M
Net Debt (2025)
$35,222 M
Total Liabilities (2025)
$70,541 M
Stockholders' Equity (2025)
$32,169 M
Current Ratio (2025)
1.46
Current Ratio (TTM)
1.305
Debt/Equity (2025)
141%
Debt/Equity (TTM)
115.5%
Goodwill (2025)
$15,491 M
Goodwill + Intangibles (2025)
$28,022 M
Tangible Book Value (2025)
$4,147 M
Net Debt/EBITDA
1.88x
Cash & Equivalents
$10.27 B
Short-Term Investments
$5.54 B
Total Liquid Assets
$15.81 B
Working Capital
$9.76 B
Long-Term Debt
$42.12 B
Short-Term Debt
$3.37 B
Operating Cash Flow (2025)
$7,408 M
CapEx (2025)
$2,112 M
Free Cash Flow (2025)
$5,296 M
Dividends Paid (2025)
$8,779 M
Share Repurchases (2025)
$746 M
Annualized Dividend
$2.04/share
Payout Ratio
67%
SG&A (2025)
$14.52 B
Selling & Marketing Expense (2025)
$5.4 B
Equity Method Earnings (2025)
$2.03 B
Gain on Sale (2025)
$635 M
FCF/Dividend Coverage
0.60x
Strengths
Concerns
The Coca-Cola Company (KO) is a mega-cap ($377.4B) defensive beverage franchise with best-in-class profitability metrics including 34.9% operating margin and 42.1% ROE, though the ROE is artificially elevated by aggressive share buybacks. The 2025 results show strong operating leverage with net income growing 23% YoY to $13.1B despite modest 1.9% revenue growth, demonstrating successful pricing actions and cost management. However, the stock trades at a premium 26.34x P/E near its 52-week high with concerning FCF deterioration (0.60x dividend coverage), making it best suited for long-term income investors willing to overlook near-term cash flow quality in exchange for defensive characteristics and reliable dividend growth.