WILL COCA-COLA ALWAYS GO UP? Message Board

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Strategies & Market Trends : WILL COCA-COLA ALWAYS GO UP?

KO 71.65

+1.6%

3:59 PM EST

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To: Dulane U. Ponder who wrote (1284)	10/10/1998 5:56:00 AM
From: Investor-ex!	Read Replies (3) of 1462

Hi Dulane, Here's KO's numbers, all from First Call: Earnings surprises: 12/96 -$0.01 03/97 +$0.01 06/97 +$0.01 09/97 -$0.01 12/97 -$0.01 03/98 $0.00 06/98 $0.00 KO has missed earnings three times over the past seven quarters, though through adept financial engineering, the amounts by which they've over/under-shot their "final guidance" is immaterial. P/E ~40 this would be OK (for KO) if growth was ~20%+, but it's not P/S ~8 won't even comment on this Projected 5 yr growth rate = 7% With 1998 earnings, the projected growth rate indicates KO should be priced at ~$10 (seven times 1998 earnings). Throw in an extremely generous 150-200% premium for KO's brand-name and current market-share and something approaching reasonable value (for KO) would be maybe $25-30/sh. In 1997, KO earned $1.64/sh In 1998, KO expects $1.46/sh, a decline of 11% over 1997 In 1999, KO expects $1.60/sh, (this might be too high) One should never sell or sell short based on valuation alone. Have a nice trade!

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