KO
KO
Hold 2026-04-24
Model
DDM
Price at Report
$76.28
Base IV
$67.77
Bear IV
$52.20
Bull IV
$89.79
Entry Zone: 50-62 · Sell Above: 78
Bore Family Office
Valuation Report — The Coca-Cola Company (KO) • April 24, 2026
3-Stage DDM (Ke) • Discount Rate: 6.17% • Current Price: $76.28
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
The Coca-Cola Company is the world's largest non-alcoholic beverage company, with a portfolio spanning sparkling soft drinks (Coca-Cola, Diet Coke, Sprite), water (Dasani, Smartwater), sports drinks (Powerade), coffee (Costa), and emerging categories. KO operates a capital-light franchise model — it sells concentrate/syrup to bottlers (like Coca-Cola Consolidated) who handle manufacturing and distribution. This asset-light structure drives 62% gross margins and 28% operating margins, among the highest in consumer staples. KO has raised its dividend for 62 consecutive years, making it a Dividend King and the quintessential dividend growth holding.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Sparkling Soft Drinks | $22,000M | 46% | +4.0% | — | Coca-Cola, Diet Coke, Sprite, Fanta |
| Water, Sports & Coffee | $12,500M | 26% | +6.0% | — | Dasani, Smartwater, Powerade, Costa |
| Emerging & Value-Added | $8,200M | 17% | +8.0% | — | BodyArmor, Fairlife, Coke Zero Sugar |
| Global Ventures & Other | $5,241M | 11% | +3.0% | — | Costa retail, strategic brands, corporate |
| Blended Growth Rate | — | 100% | +5.1% | — | Weighted avg across segments |
📊 Business Lifecycle Stage
Stage 1
Startup
Startup
Stage 2
Hyper Growth
Hyper Growth
Stage 3
Self Funding
Self Funding
Stage 4
Operating Leverage
Operating Leverage
Stage 5
Capital Return
Capital Return
Stage 6
Decline
Decline
Stage 4 — Operating Leverage: Revenue growing modestly with profits inflecting rapidly. The classic DCF sweet spot — FCF is reliable, growing, and well-anchored to analyst estimates.
Why this drives model selection: Classic DCF sweet spot — FCF inflecting and growing rapidly.
🔍 Quality Scorecard
| Metric | Value | Assessment |
|---|---|---|
| ROIC | 30.0% | ≥12% strong |
| FCF Margin | 11.1% | ≥10% strong |
| Debt / EBITDA | 2.8x | 2–4x moderate |
| Revenue Trend | Growing 3yr | 3-year directional trend |
| FCF Margin Trend | Stable (±1pp) | Directional margin trajectory |
| Analyst Revisions | Upward revisions | Last 90 days consensus direction |
✅ Quality profile supports the valuation
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $38,655 | $43,004 | $45,754 | $47,061 | $47,941 |
| Rev YoY Growth | — | +11.3% | +6.4% | +2.9% | +1.9% |
| Gross Margin | 60.3% | 58.1% | 59.5% | 61.1% | 61.6% |
| EBITDA ($M) | $11,760 | $12,169 | $12,439 | $11,067 | $14,812 |
| EBITDA Margin | 30.4% | 28.3% | 27.2% | 23.5% | 30.9% |
| Operating Income ($M) | $10,308 | $10,909 | $11,311 | $9,992 | $13,762 |
| Operating Margin | 26.7% | 25.4% | 24.7% | 21.2% | 28.7% |
| Net Income ($M) | $9,771 | $9,542 | $10,714 | $10,631 | $13,107 |
| Net Margin | 25.3% | 22.2% | 23.4% | 22.6% | 27.3% |
| EPS (diluted) | $2.25 | $2.19 | $2.47 | $2.46 | $3.04 |
| Free Cash Flow ($M) | $11,258 | $9,534 | $9,747 | $4,741 | $5,296 |
| Annual DPS | $1.680 | $1.760 | $1.840 | $1.940 | $2.040 |
| Total Debt ($M) | $40,500 | $37,500 | $35,547 | $42,375 | $42,119 |
💹 Capital Return & Share Count Analysis
Net Share Change
-0.9% (2021→2025)
📉 Net reduction — buybacks exceed issuances
| Year | Diluted Shares (M) | YoY Change | Buyback Spend ($M) | Buyback Yield |
|---|---|---|---|---|
| 2021 | 4340.0M | — | $500 | 0.2% |
| 2022 | 4350.0M | +0.2% | $200 | 0.1% |
| 2023 | 4339.0M | -0.3% | $400 | 0.1% |
| 2024 | 4320.0M | -0.4% | $200 | 0.1% |
| 2025 | 4302.0M | -0.4% | $100 | 0.0% |
KO's buyback program is modest and inconsistent — share count is essentially flat over 5 years. The dividend is the primary capital return mechanism (78% FCF payout). Buybacks offset dilution but don't drive per-share growth meaningfully.
⚙️ Ke (DDM)
| Input | Value | Notes |
|---|---|---|
| Risk-Free Rate (Rf) | 4.25% | 10-yr US Treasury yield |
| Beta (β) | 0.350 | Market beta (Finnhub) |
| Equity Risk Premium (ERP) | 5.5% | Damodaran US ERP |
| Cost of Equity (Ke) | 6.17% | Ke = Rf + β × ERP |
📈 DDM Scenarios
$52
🔴 Bear
$68
📊 Base
$90
🚀 Bull
$76.28
Current Price
$83
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | Ke | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | 3.0% | 2.0% | 2.0% | 6.17% | $52 | ▼31.6% |
| 📊 Base | 5.5% | 3.5% | 2.5% | 6.17% | $68 | ▼11.2% |
| 🚀 Bull | 8.0% | 5.0% | 3.0% | 6.17% | $90 | ▲17.7% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 3.0% | Stage 2: 2.0% | Terminal: 2.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $2.101 | $1.979 | $1.98 |
| Year 2 | Stage 1 | $2.164 | $1.920 | $3.90 |
| Year 3 | Stage 1 | $2.229 | $1.863 | $5.76 |
| Year 4 | Stage 1 | $2.296 | $1.807 | $7.57 |
| Year 5 | Stage 1 | $2.365 | $1.753 | $9.32 |
| Year 6 | Stage 2 | $2.412 | $1.684 | $11.01 |
| Year 7 | Stage 2 | $2.460 | $1.618 | $12.62 |
| Year 8 | Stage 2 | $2.510 | $1.555 | $14.18 |
| Year 9 | Stage 2 | $2.560 | $1.493 | $15.67 |
| Year 10 | Stage 2 | $2.611 | $1.435 | $17.11 |
| Terminal | — | TV=$63.87 | PV(TV)=$35.10 (67% of IV) | $52.20 |
| Intrinsic Value | — | — | PV(Divs) $17.11 + PV(TV) $35.10 | $52.20 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (6.17%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (2.0%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $63.87. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $35.10). Intrinsic value = PV of all dividends ($17.11) + PV of terminal value ($35.10) = $52.20 per share.
Base Scenario
Stage 1: 5.5% | Stage 2: 3.5% | Terminal: 2.5%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $2.152 | $2.027 | $2.03 |
| Year 2 | Stage 1 | $2.271 | $2.014 | $4.04 |
| Year 3 | Stage 1 | $2.395 | $2.002 | $6.04 |
| Year 4 | Stage 1 | $2.527 | $1.989 | $8.03 |
| Year 5 | Stage 1 | $2.666 | $1.976 | $10.01 |
| Year 6 | Stage 2 | $2.760 | $1.927 | $11.94 |
| Year 7 | Stage 2 | $2.856 | $1.878 | $13.81 |
| Year 8 | Stage 2 | $2.956 | $1.831 | $15.64 |
| Year 9 | Stage 2 | $3.060 | $1.785 | $17.43 |
| Year 10 | Stage 2 | $3.167 | $1.740 | $19.17 |
| Terminal | — | TV=$88.44 | PV(TV)=$48.60 (72% of IV) | $67.77 |
| Intrinsic Value | — | — | PV(Divs) $19.17 + PV(TV) $48.60 | $67.77 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (6.17%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (2.5%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $88.44. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $48.60). Intrinsic value = PV of all dividends ($19.17) + PV of terminal value ($48.60) = $67.77 per share.
Bull Scenario
Stage 1: 8.0% | Stage 2: 5.0% | Terminal: 3.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $2.203 | $2.075 | $2.08 |
| Year 2 | Stage 1 | $2.379 | $2.111 | $4.19 |
| Year 3 | Stage 1 | $2.570 | $2.147 | $6.33 |
| Year 4 | Stage 1 | $2.775 | $2.184 | $8.52 |
| Year 5 | Stage 1 | $2.997 | $2.222 | $10.74 |
| Year 6 | Stage 2 | $3.147 | $2.197 | $12.94 |
| Year 7 | Stage 2 | $3.305 | $2.173 | $15.11 |
| Year 8 | Stage 2 | $3.470 | $2.149 | $17.26 |
| Year 9 | Stage 2 | $3.643 | $2.126 | $19.39 |
| Year 10 | Stage 2 | $3.826 | $2.102 | $21.49 |
| Terminal | — | TV=$124.30 | PV(TV)=$68.31 (76% of IV) | $89.79 |
| Intrinsic Value | — | — | PV(Divs) $21.49 + PV(TV) $68.31 | $89.79 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (6.17%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (3.0%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $124.30. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $68.31). Intrinsic value = PV of all dividends ($21.49) + PV of terminal value ($68.31) = $89.79 per share.
🔲 Sensitivity Table
| Ke \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 4.2% | $100 | $119 | $148 | $201 | $332 |
| 4.7% | $84 | $96 | $114 | $142 | $193 |
| 5.2% | $72 | $81 | $93 | $109 | $136 |
| 5.7% | $64 | $70 | $78 | $89 | $105 |
| 6.2% | $57 | $61 | $67 | $75 | $86 |
| 6.7% | $51 | $55 | $59 | $65 | $72 |
| 7.2% | $46 | $49 | $53 | $57 | $62 |
| 7.7% | $42 | $45 | $47 | $51 | $55 |
| 8.2% | $39 | $41 | $43 | $46 | $49 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🏦 Comparable Valuation
| Company | Ticker | P/E | EV/EBITDA | P/FCF | Div Yield | Notes |
|---|---|---|---|---|---|---|
| PepsiCo | PEP | 22.5x | 16.2x | 25.8x | 3.2% | Diversified snacks/bev; higher yield |
| Keurig Dr Pepper | KDP | 20.1x | 14.8x | 22.0x | 2.6% | Coffee/bev; lower growth |
| Unilever | UL | 18.8x | 13.5x | 18.5x | 3.1% | Diversified consumer; EU discount |
| Procter & Gamble | PG | 24.5x | 17.8x | 24.0x | 2.4% | Dividend King; household staples |
| KO 5yr Avg | KO | 27.0x | 19.5x | 24.0x | 2.9% | Own history: trading at slight discount |
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $2.040 |
| Current Yield | 2.67% |
| Consecutive Growth Years | 62 |
| 1-yr DPS CAGR | +5.2% |
| 3-yr DPS CAGR | +5.2% |
| 5-yr DPS CAGR | +4.4% |
| 10-yr DPS CAGR | +5.8% |
| Payout Ratio (DPS/EPS) | 67.1% |
| FCF Payout Ratio | 78.2% |
| Sustainability Verdict | Safe |
62-year Dividend King — one of the longest streaks in corporate America. Payout ratio of 67% and FCF payout of ~78% are both within safe range for a mature consumer staple. The dividend is rock-solid with decades of runway at 5% growth.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $2.25 | — | — | — | Actual |
| 2022 | $2.19 | — | — | — | Actual |
| 2023 | $2.47 | — | — | — | Actual |
| 2024 | $2.46 | — | — | — | Actual |
| 2025 | $3.04 | — | — | — | Actual |
| 2026 | $3.14 | $3.32 | $3.42 | 30 | Estimate |
| 2027 | $3.31 | $3.56 | $3.68 | 29 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $38.7B | — | — | — | Actual |
| 2022 | $43.0B | — | — | — | Actual |
| 2023 | $45.8B | — | — | — | Actual |
| 2024 | $47.1B | — | — | — | Actual |
| 2025 | $47.9B | — | — | — | Actual |
| 2026 | $46.9B | $50.5B | $52.0B | 30 | Estimate |
| 2027 | $47.5B | $51.4B | $53.8B | 29 | Estimate |
(c) Individual Analyst Price Targets
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Peter Grom | UBS | Strong Buy | $90 | +18.0% |
| Kaumil Gajrawala | Jefferies | Strong Buy | $90 | +18.0% |
| Steve Powers | Deutsche Bank | Strong Buy | $86 | +12.7% |
| Andrea Teixeira | JP Morgan | Buy | $83 | +8.8% |
| Lauren Lieberman | Barclays | Buy | $70 | -8.2% |
💡 Investment Thesis
- 62-year Dividend King: KO has raised its dividend for 62 consecutive years — one of the longest streaks in corporate America. At ~2.7% yield with 5-6% growth, it's a compounding machine.
- Pricing power in a cost-conscious world: KO's brand moat allows above-inflation price hikes even as volumes soften — a rare advantage in consumer staples.
- Capital-light franchise model: By selling concentrate rather than bottling, KO earns 62% gross margins with minimal capex — most capital intensity sits with bottlers.
- Key risk — sugar/obesity regulation: Expanding sugar taxes and health regulations could structurally reduce sparkling beverage volumes in developed markets.
👔 Management Quality & Culture
CEO: James Quincey · Tenure: Since 1996 (~30 yrs)
Net Insider Buys (12m)
+581,531 shares
Incentive Alignment
⚠️ Moderate
Compensation: Equity-based compensation present
CEO Background & Track Record
Roberto Goizueta - Wikipedia
Roberto Críspulo Goizueta Cantera (November 18, 1931 – October 18, 1997) was a Cuban-born American business executive who served as the chairman, president, and chief executive officer (CEO) of The Coca-Cola Company from August 1980
Roberto Críspulo Goizueta Cantera (November 18, 1931 – October 18, 1997) was a Cuban-born American business executive who served as the chairman, president, and chief executive officer (CEO) of The Coca-Cola Company from August 1980
The Coca-Cola Company - Wikipedia
After Martin Luther King Jr. won the 1964 Nobel Peace Prize, plans for an interracial celebratory dinner in still-segregated Atlanta were not initially well supported by the city's business elite until Coca-Cola intervened. J. Paul Aus
After Martin Luther King Jr. won the 1964 Nobel Peace Prize, plans for an interracial celebratory dinner in still-segregated Atlanta were not initially well supported by the city's business elite until Coca-Cola intervened. J. Paul Aus
A History of Coca-Cola's CEOs: Their Accomplishments & Failu
Amazingly, he introduced over 500 new products, including a touchscreen soda fountain that could dispense 165 different flavor combinations. He retired in 2017 due to slowing sales. ... James Quincey became CEO of Coca-Cola in 2017.
Amazingly, he introduced over 500 new products, including a touchscreen soda fountain that could dispense 165 different flavor combinations. He retired in 2017 due to slowing sales. ... James Quincey became CEO of Coca-Cola in 2017.
Capital Allocation & Strategy
What is Growth Strategy and Future Prospects of Coca-Cola Co
The company extended its multi‑decade dividend increase streak through 2024 and into 2025, backed by an investment‑grade balance sheet and disciplined capital allocation. Robust free cash flow near $9–10 billion in 2025 pro
The company extended its multi‑decade dividend increase streak through 2024 and into 2025, backed by an investment‑grade balance sheet and disciplined capital allocation. Robust free cash flow near $9–10 billion in 2025 pro
Coca‑Cola’s pivotal year: Portfolio shifts and a new CEO
A detailed look at Coca‑Cola’s financial performance, portfolio strategy, Costa Coffee challenges and the company’s shift toward wellness, digital innovation and new leadership as Henrique Braun becomes CEO in 2026.
A detailed look at Coca‑Cola’s financial performance, portfolio strategy, Costa Coffee challenges and the company’s shift toward wellness, digital innovation and new leadership as Henrique Braun becomes CEO in 2026.
Employee Ratings
Overall Rating
3.8/5 ★★★★☆
Reviews
6,382
Culture Signal
Positive
✅ Strengths
- work-life balance
- recommend
Employee Review Excerpts
The Coca-Cola Company - Company Culture | Glassdoor
The Coca-Cola Company reviews · 4.0 · Feb 8, 2025 · Project manager · Former employee · Cairo, Cairo Governorate · Recommend · CEO approval · Business Outlook · Pros · Great company Culture focus on lean and continuous improvement
The Coca-Cola Company reviews · 4.0 · Feb 8, 2025 · Project manager · Former employee · Cairo, Cairo Governorate · Recommend · CEO approval · Business Outlook · Pros · Great company Culture focus on lean and continuous improvement
The Coca-Cola Company Reviews (7,380): Pros & Cons of Workin
How satisfied are employees working at The Coca-Cola Company?83% of The Coca-Cola Company employees would recommend working there to a friend based on Glassdoor reviews. Employees also rated The Coca-Cola Company 3.8 out of 5 for work life
How satisfied are employees working at The Coca-Cola Company?83% of The Coca-Cola Company employees would recommend working there to a friend based on Glassdoor reviews. Employees also rated The Coca-Cola Company 3.8 out of 5 for work life
Working at The Coca-Cola Company: 6,382 Reviews | Indeed.com
6,382 reviews from The Coca-Cola Company employees about The Coca-Cola Company culture, salaries, benefits, work-life balance, management, job security, and more.
6,382 reviews from The Coca-Cola Company employees about The Coca-Cola Company culture, salaries, benefits, work-life balance, management, job security, and more.
Sources: Finnhub insider data · Brave Search (Glassdoor, Indeed, Comparably, news) · Earnings surprise data from analyst forecasts · Qualitative signals are directional only.
⚖️ DDM Verdict: Hold — The Coca-Cola Company (KO)
Current price: $76.28 | Analyst Avg PT: $83.20
$52
🔴 Bear
$68
📊 Base
$90
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$62 | Begin position |
| Tier 2 — Add | ≤$60 | Add on weakness |
| Tier 3 — Full | ≤$50 | Full allocation |
| Sell Alert | ≥$78 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
Verdict: Hold. KO is a portfolio cornerstone at 2.7% yield with 5%+ growth, but at 25× forward EPS, it's priced for perfection. Wait for $70–72 to add meaningfully. Trim above $85. This is a forever hold at the right price.
📂 Current Position Summary
| Metric | Value |
|---|---|
| Shares Held | 54.87542141595762 |
| Average Cost Basis | $62.29 |
| Current Market Value | $4,186 |
| Unrealized P&L | $+768 (+22.5%) |
| Annual DPS | $2.040/yr |
| Annual Dividend Income | $112/yr |
| Current Yield (at price) | 2.67% |
| Yield on Cost | 3.28% |
| vs Target (~$200K) | $4,186 / $200,000 (2%) |
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| Model Selection | 3-Stage DDM — KO is the textbook DDM candidate: 62-year Dividend King, explicit DPS growth policy, 67% payout ratio, defensive low-vol profile. DDM on DPS is far more appropriate than DCF here. |
| Ke Build | 6.17% Ke — one of the lowest in the portfolio. Beta of 0.35 reflects KO's defensive, low-correlation profile. This low Ke amplifies the DDM value — a feature, not a bug, for a Dividend King. |
| Stage 1 Growth | 5.5% base case — analyst consensus EPS growth of ~9.4% for 2026, but DPS growth historically lags EPS growth by ~3-4pp due to payout ratio stability. 5.5% DPS growth is the sustainable rate. |
| Lifecycle Override | Classifier said Stage 4 (Operating Leverage) — reasonable given KO's pricing power and margin expansion potential. I concur and keep Stage 4. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.
Report History
2026-04-25 — DDM ★ Latest Hold 2026-04-24 — DDM Hold 2026-04-22 — DDM Accumulate 2026-04-21 — DDM Hold 2026-04-20 — DDM Hold 2026-04-19 — DDM Hold 2026-04-18 — DDM Trim 2026-04-16 — DDM Hold 2026-04-15 — DDM Trim 2026-04-14 — DDM Hold 2026-04-13 — DDM Hold 2026-04-11 — DCF Trim 2026-04-11 — DDM Accumulate 2026-04-10 — DDM Hold 2026-04-09 — DDM Hold 2026-04-08 — DDM Hold 2026-04-07 — DDM Hold 2026-03-06 — DDM Hold