KO
COCA COLA CONYSEValuation snapshot
Above base casePrice is between the base and bull cases.
Price as of Sep 4, 2026 · Valuation Sep 4, 2026
What drives KO's base case?
base-case thesisCoca-Cola's organic revenue growth reaccelerated to 10% in the first quarter of 2026 and 6% in the second quarter, prompting management to raise its full-year 2026 organic growth guidance to about 5%, in line with the company's long-standing 4-to-6%-a-year growth ambition. This case simply extends that guided pace, tapering gradually as the recent pricing and volume tailwinds normalize toward the lower half of management's target range. Profitability is assumed to hold near the improved level the company just reported (comparable operating margin up to 35.6% in the first quarter of 2026), and the tax rate follows management's own updated 2026 guidance. Investment in the business continues at a pace consistent with recently guided capital spending, funding growth without major strategic surprises in either direction.
What shapes the assumptions
Guided organic growth reacceleration
organic revenue growth: Q1 2026 +10%, Q2 2026 +6%, FY26 guide ~5%
Raises revenue growth
Long-term growth algorithm
management's stated 4-6% organic revenue growth target
Raises revenue growth
Comparable margin expansion
comparable operating margin 34.7% -> 35.6% year-over-year
Raises operating margin
Global minimum tax step-up
effective tax rate guided to ~19.9% for FY2026, up from 17.9% in FY2025
Raises tax rate
Steady capex guidance
FY2026 capex guided at $2.2B (~4.4% of revenue)
Informs reinvestment
Each driver links a business metric to the forecast assumption it shapes — the basis for this case, not investment advice.
Why the gap?
The market is pricing this as if revenue grows 6.7% a year. Over the last 5 years it grew 8.1% a year, so the price assumes about what it has delivered.
What else could explain it?›
- Or, holding growth steady
- the price is also consistent with a 39.5% operating margin, against the 35.5% assumed here.
- How confident is this estimate?
- Robustness 56.0/10 (Moderate) — some of any gap is our own uncertainty rather than disagreement.
- What would change the answer?
- Which assumption this valuation swings on, and by how much.
Many combinations of assumptions reproduce the same price. These are ways to read what the market might be expecting, not the market's actual view. How this is worked out
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
View details
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
Three independently researched cases generated automatically from published financials. Every assumption is justified and cited; the discount rate is computed from researched market inputs.
Company value drivers
Ranked operating metrics and the valuation assumptions they influence.
1. Organic revenue growth, full year
Company-defined non-GAAP measure of price/mix plus concentrate/volume growth excluding currency and structural items; the primary top-line driver management itself targets and guides to.
5.0%
estimated2. Comparable operating margin, Q1 (year-over-year)
Non-GAAP operating margin excluding one-off items; management's preferred profitability metric and the cleanest read on underlying cost/pricing execution.
35.6%
reported3. Effective tax rate, full year
The company's reported/guided effective income tax rate, which directly sets after-tax cash flow available to investors.
19.9%
estimated4. Capital expenditures as % of revenue, full year
Capex relative to net revenue, reflecting KO's asset-light concentrate/marketing model; the main lever behind the reinvestment-rate assumption.
4.4%
estimated5. Global unit case volume growth, quarterly
Physical volume growth across Coca-Cola's global system, the truest read on underlying consumer demand independent of pricing/currency.
5.0%
reportedBase inputs from financials
source period →Base revenue (TTM)
$49.3B
Diluted shares
4,314,000,000
Net cash
-$26.1B
Bear
low confidence$60.41
IV / share
-32.0% vs $88.84
- Explicit cash flows
- $11.68
- Terminal value
- $54.77
- Net cash
- -$6.04
- Intrinsic value / share
- $60.41
90.7% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
bear revenue growth (avg 3%) runs well above the trailing -23% trend
Revenue growth3.0% → 2.8% → 2.5% → 2.5% → 2.2%medium
How derived: FY2025 organic revenue growth slowed to 5% from 12% in FY2024 as pandemic/inflation-era pricing lapped (Q4/FY2025 release); this case assumes deceleration continues toward 2-3% as pricing power fades, North American volumes stay negative, and GLP-1/boycott-related demand softness persists, converging near long-run mature-category growth.
Why this confidence: Only the two most-recent quarters show reacceleration, so a return to deceleration is not yet confirmed in the data ↓, A 5-year horizon amplifies uncertainty in extrapolating from a single demand shock (boycott, GLP-1) ↓, Directly grounded in company-reported organic growth deceleration from 12% to 5% ↑
Measured by
- Organic revenue growth, full year5.0%estimated
- Global unit case volume growth, quarterly5.0%reported
Evidence for
- FY2025 net revenue growth was only 2% (to $47.9B) versus 6% in FY2023, showing sharp deceleration in reported top line as pricing-driven organic growth normalized.[KO Q4 & FY2025 Results]· primary
- North America NARTD volumes fell roughly 3% amid boycott-related demand softness among Hispanic consumers.[Food Dive: KO Sales Slip Following Hispanic Consumer Boycott]· secondary
- Morgan Stanley research estimates GLP-1 drug users cut sugary beverage consumption by roughly 25-30%, a structural headwind to core CSD volumes.[FoodNavigator: KO Rides Zero-Sugar/Protein Boom Amid GLP-1 Shift]· secondary
Evidence against
- Coca-Cola management stated GLP-1 drugs are 'not a big aggregate factor for the beverage industry' so far.[FoodNavigator: KO Brushes Off Tariff, GLP-1, Policy Risks]· secondary
- Q1 2026 organic revenue growth accelerated to 10% and management raised FY2026 organic growth guidance to about 5%, contradicting a continued-deceleration narrative.[KO Q1 2026 Results & Updated Guidance]· primary
Operating margin32.0%medium
How derived: Reported quarterly operating margin has been volatile (32.9% in Q1 2025 down to 15.6% in Q4 2025 per company filings, reflecting restructuring and one-off charges); this case assumes commodity, aluminum-tariff, and marketing-investment cost pressure caps margin recovery near 32%, below the 35-36% comparable margin management has recently cited.
Why this confidence: The Q4 2025 margin print (15.6%) shows real, filing-based downside risk ↑, Contradicted by the comparable-margin expansion narrative seen in most other recent quarters ↓, GAAP vs. comparable (non-GAAP) margin bases differ, adding measurement uncertainty ↓
Measured by
- Comparable operating margin, Q1 (year-over-year)35.6%reported
Evidence for
- Q4 2025 reported operating margin was just 15.6%, far below the 33-35% typical in surrounding quarters, showing real downside margin volatility from one-off items.[KO Q4 & FY2025 Results]· primary
- Potential aluminum tariffs are an acknowledged cost risk for Coca-Cola's packaging, even where management downplays the near-term impact.[FoodNavigator: KO Brushes Off Tariff, GLP-1, Policy Risks]· secondary
Evidence against
- Comparable operating margin actually expanded to 35.6% in Q1 2026 from 34.7% a year earlier, running counter to a margin-compression thesis.[TIKR: KO Q1 2026 Operating Margin Inflection]· secondary
Tax rate22.0%medium
How derived: FY2025 effective tax rate was 17.9% (10-K), but management's own FY2026 guidance already lifts the underlying rate to about 19.9% due to global minimum tax rules; this case assumes further increases toward 22% as more jurisdictions implement Pillar Two and transfer-pricing scrutiny rises.
Why this confidence: Directly anchored to company-reported actual (17.9%) and guided (19.9%) tax rates ↑, Pillar Two implementation pace beyond 2026 across jurisdictions is not yet legislated everywhere, adding forecast uncertainty ↓
Measured by
- Effective tax rate, full year19.9%estimated
Evidence for
- KO's own FY2026 guidance already raises the underlying effective tax rate by a full point to about 19.9%, evidencing an upward trend.[TIKR: KO Tax Rate Cut Boosts 2026 EPS Guidance]· secondary
- FY2025 10-K reports an effective tax rate of 17.9%, the launch point from which further increases could occur as global minimum tax rules phase in.[KO FY2025 Form 10-K]· primary
Evidence against
- The FY2026 guided rate of 19.9% is presented by management as a specific step tied to known rule changes, not an open-ended escalation.[TIKR: KO Tax Rate Cut Boosts 2026 EPS Guidance]· secondary
Reinvestment rate10.0%low
How derived: FY2025 capex was $2.1B (about 4.4% of $47.9B revenue) and FY2026 guidance is $2.2B; in a low-growth bear case with margin pressure, this case assumes management pulls back growth capex and bolt-on M&A to protect the dividend, lowering net reinvestment intensity relative to NOPAT.
Why this confidence: No company disclosure supports an actual capex cut; this is an analyst-constructed stress case ↓, Based on real, reported capex and free-cash-flow figures as the starting point ↑
Measured by
- Capital expenditures as % of revenue, full year4.4%estimated
Evidence for
- KO's 2025 capex of $2.1B against $8.8B of dividends paid shows capex is already a small, flexible piece of the capital budget that could be trimmed under stress.[Motley Fool: KO Dividend Yield & FY2026 FCF Guidance]· secondary
Evidence against
- FY2026 capex guidance of $2.2B is actually higher than FY2025's $2.1B, the opposite of a spending cut.[Motley Fool: KO Dividend Yield & FY2026 FCF Guidance]· secondary
Terminal growth2.0%medium
How derived: With FY2025 organic growth already down to 5% from 12%, and structural volume headwinds (GLP-1, health trends, potential sugar taxes) capping category growth, this case anchors terminal growth at roughly the Fed's long-run 2% inflation target with no real per-unit volume growth.
Why this confidence: Terminal assumptions 5+ years out are inherently low-confidence for any company ↓, Anchored to an objective macro benchmark (Fed long-run inflation target) rather than a company-specific guess ↑
No tracked driver measures this assumption yet.
Evidence for
- CSDs are about 69% of Coca-Cola's unit case volume, the category most exposed to sugar taxes and GLP-1-driven demand shifts, limiting long-run real growth.[SOAR Analysis: KO Commercial Risks]· estimate
Evidence against
- KO has historically priced ahead of inflation and gained value share in several emerging markets (Colombia, Brazil, Mexico) in FY2024, which could keep nominal growth above pure inflation.[KO Q4 & FY2024 Results]· primary
Base
medium confidence$79.28
IV / share
-10.8% vs $88.84
- Explicit cash flows
- $13.05
- Terminal value
- $72.26
- Net cash
- -$6.04
- Intrinsic value / share
- $79.28
91.2% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
base revenue growth (avg 4%) runs well above the trailing -23% trend
Revenue growth5.0% → 4.5% → 4.2% → 4.0% → 3.8%high
How derived: Management raised FY2026 organic revenue growth guidance to approximately 5% (from 4-5%) after Q2 2026 organic growth of 6%, consistent with the company's long-stated 4-6% long-term organic growth algorithm; this case starts at the guided ~5% and gradually reverts toward the middle of that long-term range as recent pricing-driven strength normalizes.
Why this confidence: Directly matches explicit, recent management guidance that has been raised twice in 2026 ↑, A 5-year path requires assuming guidance-level growth persists well beyond the single guided year ↓
Measured by
- Organic revenue growth, full year5.0%estimated
- Global unit case volume growth, quarterly5.0%reported
Price implies: 6.7% vs our 4.3% — one of several sets that fit this price
Evidence for
- KO raised FY2026 organic revenue growth guidance to about 5% after Q2 2026 organic growth of 6% and reported revenue growth of 7%.[KO Q2 2026 Earnings Release (8-K)]· primary
- Company's stated long-term growth algorithm targets 4-6% organic revenue growth annually.[KO Q1 2026 Results & Updated Guidance]· primary
Evidence against
- FY2025 full-year organic growth was only 5% and net revenue growth just 2%, showing the algorithm's upper end is not always achieved.[KO Q4 & FY2025 Results]· primary
Operating margin35.5%medium
How derived: Comparable operating margin expanded roughly 90bps year-over-year to 35.6% in Q1 2026, driven by organic growth and cost control per management; this case holds margin near that recently achieved level as the base/normal run-rate.
Why this confidence: Grounded in a specific, recently reported comparable-margin data point ↑, The comparable (non-GAAP) figure excludes one-off items that periodically hit GAAP margin materially ↓
Measured by
- Comparable operating margin, Q1 (year-over-year)35.6%reported
Price implies: 39.5% vs our 35.5% — one of several sets that fit this price
Evidence for
- Comparable operating margin rose to 35.6% from 34.7% year-over-year in Q1 2026.[TIKR: KO Q1 2026 Operating Margin Inflection]· secondary
Evidence against
- GAAP operating margin swung from 32.9% (Q1 2025) to just 15.6% (Q4 2025), showing headline margin is far more volatile than the smoothed comparable figure this case relies on.[KO Q4 & FY2025 Results]· primary
Tax rate19.9%high
How derived: Management guided FY2026 underlying effective tax rate to approximately 19.9%, a one-point increase from FY2025's 17.9% actual (10-K) tied to global minimum tax rules; this case uses that guided rate as the steady-state forecast assumption.
Why this confidence: Uses management's own explicit forward guidance for the exact forecast year ↑, Applying a single guided year's rate across all 5 forecast years assumes no further Pillar Two-driven changes ↓
Measured by
- Effective tax rate, full year19.9%estimated
Evidence for
- CFO commentary ties the FY2026 guided 19.9% underlying effective tax rate directly to raised EPS guidance.[TIKR: KO Tax Rate Cut Boosts 2026 EPS Guidance]· secondary
Evidence against
- FY2025 actual effective tax rate was lower, at 17.9%, so the guided rate assumes a real step-up not yet realized in actual results.[KO FY2025 Form 10-K]· primary
Reinvestment rate16.0%medium
How derived: Capex was $2.1B in FY2025 (about 4.4% of revenue) and is guided to $2.2B in FY2026, consistent with KO's asset-light concentrate-and-marketing model; this case sets reinvestment (net capex plus working capital and modest bolt-on M&A) at a moderate level consistent with mid-single-digit growth funding.
Why this confidence: Anchored in specific, recently guided capex dollar figures ↑, Excludes potential lumpy M&A spend not captured in capex guidance alone ↓
Measured by
- Capital expenditures as % of revenue, full year4.4%estimated
Evidence for
- FY2026 guidance calls for about $14.6B of operating cash flow against about $2.2B of capex, implying capex needs remain a modest share of cash generation.[Motley Fool: KO Dividend Yield & FY2026 FCF Guidance]· secondary
Evidence against
- Coca-Cola periodically makes larger bolt-on acquisitions as part of its portfolio strategy, which can push effective reinvestment above steady-state capex alone in any given year.[KO FY2025 Form 10-K]· primary
Terminal growth2.5%medium
How derived: With FY2026 organic growth guided near 5% and expected to moderate toward the low end of the 4-6% long-term algorithm over time, and NARTD category growth typically tracking a bit above inflation given emerging-market unit growth, this case sets terminal growth at 2.5%, in line with long-run nominal GDP-plus-inflation blends used for stable global consumer staples.
Why this confidence: Terminal-year assumptions are inherently the least certain part of any DCF ↓, Consistent with the low end of the company's own long-term growth algorithm plus historical emerging-market share gains ↑
No tracked driver measures this assumption yet.
Evidence for
- KO gained value share in several emerging markets (Colombia, Brazil, Mexico) in FY2024, supporting above-inflation nominal growth potential over the long run.[KO Q4 & FY2024 Results]· primary
Evidence against
- Developed-market CSD volumes have been flat-to-declining for years, which could cap blended long-run growth nearer pure inflation.[Food Dive: KO Sales Slip Following Hispanic Consumer Boycott]· secondary
Bull
low confidence$97.22
IV / share
+9.4% vs $88.84
- Explicit cash flows
- $13.56
- Terminal value
- $89.70
- Net cash
- -$6.04
- Intrinsic value / share
- $97.22
92.3% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
bull revenue growth (avg 6%) runs well above the trailing -23% trend
Revenue growth6.5% → 6.0% → 5.5% → 5.2% → 5.0%low
How derived: Organic revenue growth printed 10% in Q1 2026 and 6% in Q2 2026, both at or above the top of management's normal 4-6% algorithm; this case assumes the recent reacceleration (higher concentrate/volume growth, not just price) persists near the upper end of guidance for longer before gradually normalizing.
Why this confidence: Recent two quarters materially beat the long-term algorithm, but this is a short data series ↓, Driven by volume/concentrate growth, not just price, a healthier and more repeatable growth-quality signal ↑
Measured by
- Organic revenue growth, full year5.0%estimated
- Global unit case volume growth, quarterly5.0%reported
Evidence for
- Q1 2026 organic revenue growth of 10% was driven mainly by an 8-point increase in concentrate sales (volume), not just pricing, suggesting genuine demand strength.[KO Q1 2026 Results & Updated Guidance]· primary
- Q2 2026 global unit case volume grew 5%, and management again raised full-year guidance.[KO Q2 2026 Earnings Release (8-K)]· primary
Evidence against
- FY2025 organic growth was only 5% and net revenue growth just 2%, so a sustained 6%+ pace would be well above the company's own multi-year track record.[KO Q4 & FY2025 Results]· primary
Operating margin38.5%low
How derived: Comparable operating margin has been expanding (34.7% to 35.6% year-over-year in Q1 2026), and management points to revenue-growth-management and an increasingly asset-light bottling footprint as durable levers; this case assumes that expansion continues for several more years toward a high-30s% margin.
Why this confidence: Extrapolates a single year of comparable-margin improvement several years into the future ↓, Consistent with management's own stated structural margin levers (revenue-growth-management, asset-light model) ↑
Measured by
- Comparable operating margin, Q1 (year-over-year)35.6%reported
Evidence for
- Management attributes recent margin expansion to organic growth, cost control, and an increasingly asset-light model, framed as ongoing structural levers rather than one-time gains.[TIKR: KO Q1 2026 Operating Margin Inflection]· secondary
Evidence against
- GAAP operating margin fell as low as 15.6% in Q4 2025, showing real-world results can diverge sharply from the smoothed comparable-margin trend this case relies on.[KO Q4 & FY2025 Results]· primary
Tax rate18.5%low
How derived: FY2025's actual effective tax rate was 17.9% per the 10-K; this case assumes continued tax efficiency largely offsets the incremental global-minimum-tax impact embedded in the FY2026 guided 19.9% rate, keeping the effective rate close to the FY2025 actual level.
Why this confidence: Runs counter to management's own explicit guidance for the coming year, a specific downside to this optimistic assumption ↓, Anchored to an actual, already-achieved historical rate rather than a hypothetical ↑
Measured by
- Effective tax rate, full year19.9%estimated
Evidence for
- FY2025's actual reported effective tax rate of 17.9% is lower than the FY2026 guided rate, showing the company has historically managed its tax rate below 19.9%.[KO FY2025 Form 10-K]· primary
Evidence against
- Management itself guided the rate up to about 19.9% for FY2026, an increase it attributes to structural global minimum-tax changes rather than a one-off.[TIKR: KO Tax Rate Cut Boosts 2026 EPS Guidance]· secondary
Reinvestment rate24.0%low
How derived: Base capex is guided at $2.2B for FY2026 (about 4.4% of revenue); this case assumes materially higher growth (6%+ organic) requires proportionally more reinvestment, including capacity expansion and bolt-on acquisitions similar to past portfolio moves, raising the reinvestment rate well above the base case.
Why this confidence: No company disclosure supports a higher reinvestment path; this is inferred to be consistent with the bull case's higher growth ↓, Balance-sheet capacity (low leverage, strong free cash flow) is a real, reported enabler ↑
Measured by
- Capital expenditures as % of revenue, full year4.4%estimated
Evidence for
- KO's FY2026 guided free cash flow of about $12.4B provides ample capacity to fund higher capex or M&A without straining the balance sheet, with net debt/EBITDA already below its 2-2.5x target range.[Motley Fool: KO Dividend Yield & FY2026 FCF Guidance]· secondary
Evidence against
- Actual FY2025 and guided FY2026 capex ($2.1B and $2.2B) show no company signal of a step-up in investment spending; this is an analyst assumption, not disclosed guidance.[Motley Fool: KO Dividend Yield & FY2026 FCF Guidance]· secondary
Terminal growth3.0%low
How derived: Given FY2024 value-share gains in Colombia, Brazil and Mexico and continued emerging-market population/income growth, this case assumes KO's blended long-run nominal growth settles near 3%, above pure developed-market inflation, reflecting a richer emerging-markets growth mix.
Why this confidence: Terminal growth this far out is the least certain input in any DCF ↓, Grounded in specific, recently reported share-gain markets rather than a generic aspiration ↑
No tracked driver measures this assumption yet.
Evidence for
- KO gained NARTD value share in Colombia, Brazil, and Mexico in FY2024, evidence of durable emerging-market momentum.[KO Q4 & FY2024 Results]· primary
Evidence against
- A 3% terminal growth rate sits close to the roughly 4.76% risk-free rate used in this model, leaving a thin risk premium spread and implying the business grows nearly as fast as the broad economy forever, an aggressive long-run assumption for a mature company.[Internal model consistency check vs. risk-free rate]· estimate
Valuation robustness
reliability of the estimate, not a stock rating56 / 100 · Moderate
Formula v1.0.0. Higher means a more reliable estimate — not a recommendation.
Quality checks
Automated model-risk flags — warnings, not recommendations.
- 91% of the intrinsic value rests on the terminal value — a small change to terminal growth moves the valuation a lot.→ terminal growth
Per-share economics
Business growth after changes in the diluted share count.
| Period | Revenue growth | FCF/share | FCF/share growth | Shares | Share growth |
|---|---|---|---|---|---|
| Q2 2024 | 3.3% | 0.73 | -23.0% | 4.32B | -0.5% |
| Q3 2024 | -0.8% | -0.4 | -144.3% | 4.32B | -0.4% |
| Q1 2025 | -1.5% | -1.28 | -3595.3% | 4.31B | -0.2% |
| Q2 2025 | 1.4% | 0.78 | 6.6% | 4.32B | -0.1% |
| Q3 2025 | 5.1% | 1.06 | 364.7% | 4.31B | -0.2% |
| Q1 2026 | 12.1% | 0.41 | 131.8% | 4.31B | 0.0% |
Valuation history every run
History builds as the valuation is recalculated — this is the first recorded run.
Market inputs researched
Used the 10-year US Treasury constant-maturity yield as the risk-free rate proxy, which traded around 4.76-4.78% in early September 2026.
Coca-Cola's 5-year regression beta against the broad market is reported at roughly 0.34-0.36 by market data providers, reflecting its low-volatility consumer-staples profile; used the midpoint of 0.35.
Used Damodaran's forward-looking implied ERP for the US market (derived from S&P 500 index levels and expected cash flows), which his 2026 updates place in roughly the 4.0-4.3% range over the 10-year Treasury.
Used the most recent closing price reported by market data providers as of the valuation date.
Generated 9/4/2026, 12:12:30 PM · pipeline v1.2.0