Key Takeaways
- Coca-Cola stock is up 39% this year, and the midterm rally sent it, Procter & Gamble and Colgate-Palmolive toward 52-week highs.
- Roughly three-quarters of Coca-Cola’s gain came from investors paying a higher multiple, and only about a quarter from higher earnings estimates.
- Coca-Cola’s forward P/E is near its 10-year high, while Procter & Gamble’s is right at its own 10-year average.
- Analysts expect about 6% EPS growth in 2027, so the price holds only if the premium does.
Coca-Cola (KO) stock is up 39% this year, and the midterms gave it another push. Democrats won control of Congress, gridlock looks likelier, and investors went looking for companies that sell drinks, toothpaste and soap no matter who’s in charge.
Procter & Gamble (PG) closed 3.25% higher the day after the vote, and Colgate-Palmolive (CL) rallied by about as much. At its $95.80 close on Nov. 4, Coke now trades above the $95 target Bernstein reiterated on Nov. 3 with its Market Perform rating.
So how much of Coke’s run is earnings, and how much is investors paying more for the same earnings?
A Great Quarter, With a Much Bigger Multiple on Top
The earnings growth is real. Coca-Cola raised its 2026 outlook for the third time this year with its Oct. 27 report. It now expects comparable EPS growth of at least 11% from $3.00, after a quarter in which unit case volume grew 5%.
TIKR’s consensus has Coca-Cola earning $3.34 a share this year, $3.53 in 2027 and $3.79 in 2028:
This year’s estimate is about 4% above the $3.21 to $3.24 that management’s first 2026 guide pointed to in February.
Now for the split. Coke started 2026 at about 21x the earnings management would guide to in February. TIKR had it at 27.6x forward earnings on Nov. 2. The forward estimate behind that multiple is up about 8%. Some of that is the upgrades, and some is that the next twelve months now lean mostly on 2027. The multiple is up about 28%. Multiply the two (1.08 × 1.28) and you get roughly the year’s 39% gain.
That means roughly a quarter of the run is earnings, and three-quarters is the multiple.
TIKR Tracks 25 Analysts on Coca-Cola. How Many Say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Coca-Cola, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Coca-Cola’s Analyst Ratings
Coke’s Premium Is Its Own
Coca-Cola’s forward P/E has averaged 23x over the past decade, and it’s now at the top of that range:
The 10-year high, about 28x, came on Oct. 22.
The staples rally lifted P&G too, but its multiple sits right at its own average, a long way from Coke’s premium:
That fits a slower business. P&G expects core EPS to rise just 1.5% this fiscal year at the midpoint, with higher commodity, interest and currency costs an 11% drag. Colgate is growing faster, and it raised its forecast for base-business EPS growth to 5% to 7%. Still, Coke is the one priced near a decade high.
Paying Up for 6% Growth
Investors will pay up for safety for long stretches, and Coke has given them reasons: its value share gains reached 22 straight quarters. But P&G’s chart shows how quickly that can fade. Its multiple fell from 27x in January 2022 back to about its average.
The growth ahead is fine, but nothing special. Analysts’ $3.53 for 2027 is about 6% above this year’s estimate. Management says the sale of its African bottler alone takes about 2 points off 2027 comparable EPS growth. If the multiple slid back to its 23.4x average on the same forward earnings, Coke would trade around $81.
I’d wait. Coca-Cola is executing about as well as it ever has. But at a multiple near its 10-year high for roughly 6% growth next year, I’d want a better price.
So what is Coca-Cola stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Coca-Cola could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
