The Coca-Cola Company (KO) Stock Valuation — PE Analysis
Beverages - Non-Alcoholic · NYSE
Current Price
$82.62
PE Ratio (TTM)
25.9x
Intrinsic Value
$86.29
+4.3% margin of safety
COMPETITIVE MOAT
↑Global Brand Recognition
Coca-Cola's iconic brand is instantly recognizable worldwide, fostering strong consumer loyalty and pricing power. This deep-seated familiarity is difficult for competitors to replicate.
↑Extensive Distribution Network
The company possesses an unparalleled global bottling and distribution infrastructure. This allows for efficient product placement and availability, creating a significant barrier to entry.
↑Scale and Bargaining Power
Coca-Cola's immense scale provides significant leverage with suppliers and retailers. This allows for favorable terms and cost efficiencies that smaller rivals cannot match.
INVESTMENT RISKS
↓Shifting Consumer Preferences
Growing health consciousness and demand for healthier alternatives pose a threat. Consumers are increasingly seeking lower-sugar and natural beverage options.
↓Intensifying Competition
The beverage market is highly competitive with numerous global and local players. New entrants and innovative products constantly challenge market share.
↓Regulatory and Environmental Pressures
Increasing scrutiny on sugar content, plastic packaging, and water usage can lead to higher operating costs and potential restrictions. These factors can impact profitability and brand image.
Base case
KO base case PE valuation
A base case PE valuation for KO estimates a fair value of about $86.29 per share, against a current price of $82.62. The model assumes 6.9% annual earnings growth, a 26x target PE multiple, and a 10% discount rate.
Intrinsic Value
$86.29
Margin of safety
+4.3%
Expected annual return
+0.9%
Base case assumptions: 6.9% annual earnings growth, 26x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the KO PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for The Coca-Cola Company respond.
Open PE Calculator for KOCompany Overview
The Coca-Cola Company, a prominent global entity in the beverage sector, is dedicated to the creation, marketing, and worldwide sale of a broad spectrum of non-alcoholic refreshments. Its extensive product range encompasses effervescent soft drinks, including various flavored options; still and sparkling waters; sports beverages, coffees, and teas; diverse fruit juices; fortified dairy drinks; and plant-based alternatives, among other liquid offerings. In addition to finished products, the company provides beverage concentrates and syrups, specifically supplying fountain syrups to food service establishments like restaurants and convenience stores. These products are offered under an expansive portfolio of globally recognized brands, such as Coca-Cola, Diet Coke, Fanta, Sprite, Simply, Fresca, Powerade, Dasani, and Minute Maid, to name just a few. The organization leverages a sophisticated distribution network, involving independent bottling partners, a variety of distributors, wholesalers, and retailers, complemented by its own bottling and distribution operations. Established in 1886, the enterprise's central operations are based in Atlanta, Georgia.
Financial Metrics — KO PE Stock Valuation Data
PE Ratio (TTM)
25.9x
PEG Ratio
0.94
Earnings Yield
3.85%
ROE (TTM)
43.6%
Revenue/Share (TTM)
$11.46
Dividend Yield
2.52%
Debt/Equity
1.30x
Frequently Asked Questions
What is the PE ratio of KO?
The trailing twelve-month PE ratio of KO reflects how much investors pay per dollar of The Coca-Cola Company's earnings. This metric is most useful when compared to Beverages - Non-Alcoholic peers and the company's own historical range.
Is KO overvalued based on PE ratio?
KO's PE of 25.9x combined with a PEG ratio of 0.94 provides a growth-adjusted perspective. A PEG below 1.0 suggests KO may be undervalued relative to its earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Beverages - Non-Alcoholic, a DCF analysis may be more appropriate.
How do I value KO stock using PE ratio?
To value The Coca-Cola Company using PE: (1) Compare the current PE (25.9x) against the Beverages - Non-Alcoholic median to assess relative pricing, (2) check the PEG ratio (0.94) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of KO?
KO's PEG ratio is 0.94, calculated by dividing the PE ratio (25.9x) by the expected earnings growth rate. A PEG below 1.0 is traditionally considered a sign of undervaluation — the market may not be fully pricing in the growth potential. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for KO stock valuation?
PE ratio gives a quick relative read — how KO is priced versus Beverages - Non-Alcoholic peers. DCF provides an absolute value based on projected free cash flows. For KO, with a strong ROE of 43.6%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See KO DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Consumer Defensive valuationsP/E and DCF value KO with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.