Coca-Cola Updates Guidance Amid Coronavirus Fears

Coca-Cola reaffirmed its full-year outlook, though

Managing Editor
Feb 21, 2020 at 10:16 AM
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Companies are starting to unravel how the coronavirus outbreak will affect their bottom line, and the results haven't been pretty. Coca-Cola Co (NYSE:KO) adjusted its own outlook this morning, cutting its current-quarter earnings by one to two cents per share. While China is the company's third-largest market in terms of unit case volume, Coca-Cola did reaffirm its full-year guidance.

In response, Coca-Cola stock is hanging tough today, trading flat at $59.66 while most of Wall Street sells off. KO has been on a roll to start 2020, nabbing a record high of $60.07 on Feb. 14. Although that $60 level has proven elusive, a short-term floor has emerged at the $59 level, which is also home to the shares' 20-day moving average.

For a stock that's up 32.4% in the last 12 months, analysts remain split. There are 14 brokerages in coverage of KO, and seven rate it a tepid "hold," while the consensus 12-month price target of $63.50 is a slim 6.3% premium to last nights closing perch at $59.72.

Meanwhile with earnings come and gone, a volatility crush means the stock's near-term options are attractively priced at the moment. Schaeffer's Volatility Index (SVI) stands at 14%, in the 20th percentile of its annual range. This indicates that now is an attractive time to jump aboard the Dow name with options.

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