COCA-COLA CO. (KO) 66 1/16 CLOSED. Major beverage company is expected to drift lower this morning as Salomon Smith Barney reiterates its "neutral" rating on the stock. In fact, without saying that investors should sell the stock, the firm is stating that the stock is currently trading above its price target, which implies that that the stock is over priced. With current consensus estimates calling for KO earnings to grow just 4% in 1998 and now encountering a stronger dollar, earnings are expected to suffer, which correlates with the neutral rating that the firm has issued. During the past month, the stock has been one of the major beneficiaries of the flight to large cap stocks from money exiting the Far East Asia markets. However, because the stock was already overvalued, particularly after the company warned in August about growth slowing, the flow of funds into the stock has led to a further over valuation of the stock. The P/E on this issue is now well over 39 times projected 1998 earnings and with earnings expected to get hurt due to the strength of the dollar, a price mark down is required. Hence, expect this issue to be active this morning as money managers rebalance portfolios and take profits in this issue.
c Copyright 1997 E*TRADE Securities, Inc. All Rights Reserved.
Copyright c 1997 Charter Media, Inc. All rights reserved. |
