Coke trades at 26 times 2026 earnings after a 28% run. Slow growth still compounds, but the price leaves only 2% to our $87.88 target.
Key points
- $13.38 billion in second quarter 2026 sales grew on 5% second quarter 2026 case volume, meaning boxes sold, plus 2% second quarter 2026 price and mix.
- $12.40 billion in 2026 free cash flow guidance, meaning cash left after bills and factories, covers the $2.12 per share 2026 dividend.
- About $14.00 billion in 2010 to 2025 tax exposure dwarfs the $0.53 billion July 2026 reserve for the IRS dispute.
The call
The run looks done for now. At $85.90 per share on October 7 2026 the stock sells for 26.2 times 2026 earnings, meaning price divided by profit. That level needs about 5% 2026 organic sales growth, meaning sales without currency or deals, with margins near 35% in second quarter 2026.
Coke shares up 28% in a year to near highsSource: Rallies price history to Oct 1, 2026; company filings.
Growth can still compound slowly. We see $51.25 billion in 2026 sales and $3.52 per share in 2027 earnings. At 25 times 2027 earnings, meaning price divided by profit, that supports our target.
Valuation
| Driver | Estimate |
|---|
| 2026 sales | $51.25 billion in 2026 |
| 2026 profit per share | $3.29 per share in 2026 |
| 2027 profit per share | $3.52 per share in 2027 |
| Target multiple | 25 times 2027 earnings |
| 12-month target | $87.88 per share by October 2027 |
A 25 times 2027 earnings multiple fits a steady staple with a 3.3% 2026 free cash flow yield, meaning cash return on price. Upside to 26 times 2027 earnings is $91.39 per share by October 2027. Downside to 23 times 2027 earnings is $80.84 per share by October 2027, so a hold fits.
Target rests on keeping a 25 times multipleSource: Author estimates from 2025 comp EPS $3.00 and guidance; Oct 8, 2026.
Risks
- Volume fades after 5% second quarter 2026 growth if World Cup help ends, seen in slowing monthly boxes sold through 2026.
- Input or currency costs squeeze the 35% second quarter 2026 margin, seen in rising can costs and a stronger dollar through 2026.
- An IRS ruling or BODYARMOR writedown hits cash after July 2026, seen in court decisions in 2027 and impairment tests in 2026.
What would change my mind
We would turn positive if 3% yearly case volume through 2027 pairs with 3% yearly price and mix through 2027.