NEW YORK (TheStreet) -- Shares of The Coca-Cola Co (KO) were climbing, up 0.83% to $41.27 in early market trading Monday, after analysts at BMO Capital upgraded the soda company to "outperform" from "market perform" this morning.
The firm also raised its price target on the stock to $48 from $44.
BMO said it expects earnings growth in 2016 to approach the soda maker's long-term targets.
Analysts at the firm added that in 2017, they see benefits from Coca Cola's cost savings program.
Atlanta, Ga.-based Coca-Cola is a beverage company that owns or licenses and markets more than 500 nonalcoholic beverage brands, including Coca-Cola, Diet Coke, Fanta and Sprite.
Separately, TheStreet Ratings team rates COCA-COLA CO as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate COCA-COLA CO (KO) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- KO's revenue growth has slightly outpaced the industry average of 5.7%. Since the same quarter one year prior, revenues slightly increased by 1.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has increased to $1,574.00 million or 47.65% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 34.57%.
- The gross profit margin for COCA-COLA CO is rather high; currently it is at 66.11%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 14.53% trails the industry average.
- COCA-COLA CO' earnings per share from the most recent quarter came in slightly below the year earlier quarter. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, COCA-COLA CO reported lower earnings of $1.59 versus $1.90 in the prior year. This year, the market expects an improvement in earnings ($2.00 versus $1.59).
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Beverages industry and the overall market, COCA-COLA CO's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- You can view the full analysis from the report here: KO Ratings Report