Coca-Cola ( KO ) is expected to post another strong quarter as it gains ground on rival PepsiCo ( PEP ).
The soda giant will be providing 2025 guidance and issuing its fourth quarter earnings report before market open on Tuesday. Wall Street expects Q4 revenue of $10.67 billion and earnings per share of $0.52.
The Street also estimates a price/mix increase of 6.71%, while unit case volume growth is expected to decline 0.21%.
"It's only a handful of these consumer staple companies that are actually delivering the kind of growth that you would expect, or growth in line with their targets," Bank of America analyst Bryan Spillane told Yahoo Finance. The company strikes "a decent balance between volume growth and price."
For the full year, organic revenue is expected to increase 10% as higher prices have helped counter headwinds like more cautious consumers, less favorable commodity costs, and more challenging trends in international markets.
"We believe [Coca-Cola's] ability to deliver strong positive mid-single digit organic revenue growth in an environment where many global staples peers are likely to deliver positive low-single digit growth (and in some cases are struggling to hit their algorithm) continues to stand out," UBS analyst Peter Grom said in a note.
Shares of the beverage giant are up 7% in the past year, compared to a 16% drop for PepsiCo. It still trails behind the S&P 500's ( ^GSPC ) 20% gain.
Here's what Wall Street expects Coca-Cola to report in the fourth quarter, compared to what the company reported a year ago:
Spillane is also watching the Latin America market, adding if the region ends the year "better than the last couple of quarters ... that would be a good sign for 2025."
Investors are keeping an eye on whether the company can continue to deliver earnings growth. As the strength of the dollar grew "over the last several months, these concerns have increased considerably," Grom wrote.
In the prior quarter, CEO James Quincey said Coca-Cola is willing to pull other levers to offset any weakness from the dollar in its international markets.
"Over the last number of years, every time there's been a foreign exchange headwind of this kind of magnitude, we've grown US dollar earnings per share. Maybe not as much as we would have loved, but we've grown it," Quincy said.
The impact of potential tariffs and inflation on agriculture commodities, including prices of orange juice , will also be headwinds for management to address.
In the previous third quarter earnings call with investors, CFO John Murphy said he expects 2025 to be "a more normalized pricing environment."
CFRA analyst Garrett Nelson, who has a Hold on shares, said he expects "stronger sales in emerging markets and newer products, such as Coke Energy and AHA flavored sparkling water, to help support sales."
He said risks to the company include "foreign currency, consumer trends ... and lack of product diversification (no food/snack exposure)."
Fast food chains like McDonald's ( MCD ), Burger King ( QSR ), and Taco Bell ( YUM ) have been trying to boost foot traffic with value and meal deals. Coca-Cola reportedly played a role in the $5 meal bundle at McDonald's . Costco ( COST ) will also be converting its food court fountain business back over to Coca-Cola, from rival PepsiCo.
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BrookeDiPalma