Credit: Shutterstock photoCoca-Cola ( KO ) shares have been rising this week following an analyst upgrade Monday morning.
Morgan Stanley moved Coke from equal weight to overweight and retained a price target of 47, which would mark an all-time high for the stock, trading now near 43.
Coke was a growth stock in the 1990s, but it topped at 44.47 in July 1998. Although earnings have grown since then, the stock is just now getting back to its former high.
The five-year annualized EPS growth rate is 7% with an Earnings Stability Factor of 3 on a scale where low numbers correspond to the most steady earnings growth.
But analysts don't see much growth ahead. Earnings and revenue were flat from a year ago in the most recent quarterly report, and analysts are forecasting a 7% drop in the next quarterly report. They see a 2% EPS drop for 2014 and flat earnings for this year.
Several commentators have mentioned Coke as an international company that could be hurt by a rising dollar. A strong dollar diminishes the value of sales made in weaker currencies, such as the euro.
Other measures of Coke's performance remain strong. The company has a trailing four-quarter return on equity of 28%. Pretax margins in 2013 were 26%.
It has also formed strategic alliances that could help in the future. It will helpKeurig Green Mountain ( GMCR ) market a cold-beverage maker and has invested in energy-drink makerMonster Beverage ( MNST ).
Coke is a member of the nonalcoholic beverages industry group, ranked No. 16 among 197 groups. It was ranked No. 52 just three weeks ago.PepsiCo ( PEP ) andDr Pepper Snapple ( DPS ) are other strong stocks in the group.
Coke pays a regular quarterly dividend of 30.5 cents a share, which works out to a 2.9% annualized yield.
The company has raised the dividend steadily for years.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
