Powerade Lacks Punch for Coca-Cola

The beverage company's stock won't be impacted much by Powerade and other sport drinks.
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Coca Cola

's

(KO) - Get Report

competes with

PepsiCo

(PEP) - Get Report

and

Dr Pepper Snapple

(DPS)

in the carbonated soft drink (CSD) market as well as non-CSD market.

We currently have a Trefis price estimate of around $60 for Coca Cola's stock, about 6% above the current market price of around $56.

Trefis members have created forecasts for two key drivers of Coca Cola's (NYSE:KO) stock over the last week: (1) Powerade & Other Brands' Global Market Share and (2) Global Fruit Juices & Energy Drinks Market Size. The members' forecasts suggest that Powerade & Other Brands' Global Market Share will trend above the Trefis forecast.

We estimate that Powerade & other sports drink and fruit juice brands constitute around 13% of the $60 Trefis price estimate for Coca-Cola's stock. Hence the stock is not much affected by (1) Powerade & Other Brands' Global Market Share and (2) Global Fruit Juices & Energy Drinks Market Size. Below are charts showing recent estimates created by Trefis members for the two drivers in detail.

The average of forecasts for Powerade & Other Brands' Global Market Share created by Trefis members indicated a projected increase from around 26% in 2010 to around 29% by the end of the Trefis forecast period, compared to a flat baseline Trefis estimate of around 24% over the Trefis forecast period.

The member estimates imply an upside of 2% to the Trefis price estimate for Coca Cola's stock. In the past, Powerade & Other Brands' Global Market Share has increased from close to 13% in 2005 to 22% in 2009.

You can drag the forecast trend-line above to express your own view, and see the sensitivity of Coca Cola's stock to Powerade & Other Brands' Global Market Share.

Our complete analysis for Powerade & Other Brands' Global Market Share is

here

.

The baseline Trefis estimate projects an increase from close to 15 billion cases in 2010 to around 17 billion cases by the end of the Trefis forecast period. In the past, Global Fruit Juices & Energy Drinks Market Size has increased from 14 billion cases in 2005 to 14.6 billion cases in 2009.

You can drag the forecast trend-line above to express your own view, and see the sensitivity of Coca Cola's stock to Global Fruit Juices & Energy Drinks Market Size.

Trefis

is a financial community structured around trends, forecasts and insights related to some of the most popular stocks in the U.S.