COKE, Daily
Coca-Cola (COKE) is expected to report its third quarter financial report 2019 before the market opens on Friday, October 18. Market analysts anticipate that the 3rd Quarterly Financial Report will be slightly lower as compared to the previous quarter. The expected return is $ 0.56 per share (2% decrease compared to last year). However, total COKE revenue is expected to rise 15% to $ 9.47 billion. Given the history of COKE, earnings per share have exceeded analyst estimates since 2017, analysts anticipate that for Q3 the financial report is better or in line with market forecasts.
Fundamental
Coca-Cola (COKE) shares have grown more than 20% in the last 12 months, significantly higher than the Beverages market index and the S&P 500 index.
Coca-Cola is the 6th most valuable company in the world behind Apple, Facebook and several other technology companies (Forbes). Coca-Cola continues to innovate and expand its product portfolio including Costa Coffee which has the potential to challenge Starbucks, BodyArmor energy drinks and more. Coca-Cola raised its revenue potential in the second quarter of 2019.
Morgan Stanley reported that they kept the stock as the preferred choice for the beverage category after their meeting with the company’s CFO. Morgan Stanley are assured by the Coca-Cola growth formula. Coca-Cola is seen to have good pricing potential in emerging markets and improved free cash flow generation.
Technical
Currently, COKE Shares are trading at $ 53.49. It is slightly below the 12-month high of $ 55.92. COKE share price has risen 13% in 2019 and overall more than 20% over the past 12 months. From a technical standpoint, the COKE stock price still has room to the upside ahead of the 3rd quarter financial report and possibly after the report is published.
From a price action standpoint, the COKE price is currently in a bearish phase with the price declining and is currently at the 23.6% Fibonacci retracement and the nearest support is at $52.78. Market behaviour indicates that the decline is not significant and not steep enough. It can be observed that the price is still above the area support of the uptrend channel. The next support is at $51.53 equivalent to 38.2% Fibonacci retracement. The next resistance is at $54.77 and the 12-month high is $ 55.92.
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Tunku Ishak Al-Irsyad
Market Analyst – HF Educational Office – Malaysia
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