Coca-Cola Stock Eyes Ceiling After Top-Line Beat

The stock is climbing back toward its December peak today

Deputy Editor
Apr 19, 2021 at 10:26 AM
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Blue-chip beverage behemoth Coca-Cola Co (NYSE:KO) kicked off the earnings slate this week. The company posted earnings and revenue that beat estimates, citing strong product demand fueled by relaxed lockdown restrictions, specifically in Asia. Coca-Cola noted that demand has returned to its pre-pandemic levels, though the firm's CEO did warn that an extra degree of lockdowns could put pressure back on the business. At last check, KO was up 0.5% at $53.99 in response.

Coca-Cola stock has been bounding back toward its late-December annual high of $54.93, though pressure near the $54 level has continued to keep a lid on the shares. Several layers of support exist just below, however, including the 20-day moving average. KO is up 11.5% in the past 12 months. 

Several analysts chimed in with price-target hikes, including Jefferies to $56 from $53. Many members of the brokerage bunch remain hesitant, though. Of the 14 in coverage, six consider KO a "hold." The 12-month consensus price target of $58.05, meanwhile, is a 7.7% premium to current levels. 

Option traders have been a bit more bullish than usual. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), KO sports a 50-day put/call volume ratio of 3.69, which stands higher than 68% of readings from the past year. This means these speculators have been picking up calls at a quicker-than-normal clip. 

This trading has picked up today, with 19,000 calls and 8,673 puts across the tape so far -- triple the intraday average. The most popular is the weekly 4/23 54-strike call, where positions are being sold to open. This suggests these traders are expecting the $54 level to remain as pressure for the underlying equity by the time these contracts expire at the end of the week. 

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