Will the decision by Coca-Cola ( KO) to stop providing specific short-term financial forecasts prove to be a misstep on the order of "New Coke?" Perhaps not, some analysts say. The reaction by the investment community has been widely varied, but ultimately, some say, the move could be a smart one. Coke's shares initially slid on the news Friday, but have regained some steam since then. The shares were down three cents at $45.82 Monday morning. By locking quarterly and annual earnings guidance in vault along with its highly protected secret ingredient, Coke is hoping force Wall Street into adopting a longer-term view of the beverage giant.
Stender, who doesn't expect this to be the beginning of a trend, maintains a positive outlook on the company and notes that "analysts are not being left out in the cold by any means." Other analysts agree. Dan Shapiro of Atlanta-based HS Investments said, "Coke is one of the great consumer brands. It is bought and held by long-term investors. Management will still provide enough data points for us to make informed decisions." Indeed, Coke reaffirmed profit forecasts for 2003 of $1.93 per share on revenue of $21 billion to $24 billion. Martin Feldman, an analyst with Merrill Lynch, concurs that "time and resources need to be spent addressing larger, long-term strategies issues rather than towards meeting the next quarter."