How Coca-Cola’s Global Expansion Impacts Its 2025 Valuation

Wondering if Coca-Cola is still a smart buy or has become too pricey? Let's break down whether this legendary brand is offering value or just trading on its name. Shares have climbed 11.7% this year, including a steady 3.4% gain over the past month. This movement suggests that investor optimism or risk perception may be shifting. Recent headlines highlight Coca-Cola's continued expansion into global markets and strategic partnerships with sports leagues. These factors reinforce its reputation for resilient revenue streams even as consumer habits evolve. On our valuation checks, Coca-Cola scores 3 out of 6. There is more to the story than just headline numbers. Before covering the usual valuation approaches, consider a deeper way to judge whether KO truly deserves a spot in your portfolio.

Coca-Cola delivered 11.7% returns over the last year. See how this stacks up to the rest of the Beverage industry.

Approach 1: Coca-Cola Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates a company's intrinsic value by projecting its future cash flows and discounting them back to today's value. This approach helps investors see whether the stock price reflects what the business is likely to generate over time.

Coca-Cola's current Free Cash Flow is $5.6 Billion. Analyst consensus projects strong growth, with Free Cash Flow rising annually and expected to reach about $15.2 Billion by 2029. After five years, Simply Wall St extrapolates further growth based on historical trends. All projections are in US Dollars.

Basing the analysis on the 2 Stage Free Cash Flow to Equity model, the latest valuation puts Coca-Cola's fair value per share at $89.90. Currently, the stock trades at a 23.2% discount to this intrinsic value. This indicates a meaningful margin of safety for investors looking for value in a well-established brand.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Coca-Cola is undervalued by 23.2%. Track this in your watchlist or portfolio, or discover 849 more undervalued stocks based on cash flows.KO Discounted Cash Flow as at Nov 2025

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Coca-Cola.

Approach 2: Coca-Cola Price vs Earnings

The Price-to-Earnings (PE) ratio is a widely used valuation metric for profitable companies like Coca-Cola, as it shows how much investors are willing to pay for each dollar of current earnings. This makes it especially relevant for established, steady cash generators in mature markets.

Growth expectations and perceived risk play a big role in what counts as a "normal" or "fair" PE ratio. High-growth companies tend to deserve higher PE multiples, while more stable or riskier ones often trade at lower ratios.

Story Continues

Currently, Coca-Cola trades at a PE ratio of 22.8x. This sits above the beverage industry average of 17.6x, but below the average of its direct peers, which is 26.3x. However, looking only at these benchmarks can be misleading, since they do not account for important differences like profit margins, company size, or growth rates.

This is where Simply Wall St's proprietary "Fair Ratio" comes in. The Fair Ratio is calculated using a range of key factors including growth prospects, profitability, market cap, risk profile, and the broader industry context. By weighing these elements together, it delivers a more tailored and meaningful benchmark than a simple peer or industry comparison.

For Coca-Cola, the Fair Ratio is 22.6x, which is almost exactly in line with the current multiple of 22.8x. This close match suggests the market is pricing Coca-Cola quite efficiently relative to its fundamentals today.

Result: ABOUT RIGHTNYSE:KO PE Ratio as at Nov 2025

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1407 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Coca-Cola Narrative

Earlier we mentioned there is an even better way to understand valuation, so let’s introduce you to Narratives—a new approach that adds your own story behind the numbers, turning company data into a dynamic, personal investment thesis.

A Narrative is simply your perspective on where Coca-Cola is headed, capturing your assumptions about its future revenue growth, earnings, and profit margins, and expressing that as a story rather than just a number on a spreadsheet.

Narratives link the company’s history, opportunities, and risks to a financial forecast and estimated fair value, making it easy to see how your view translates into a buy, hold, or sell decision.

This innovative tool is available directly on Simply Wall St’s Community page and is used by millions of investors worldwide, allowing you to create, share, and update your perspectives with just a few clicks.

Unlike rigid models, Narratives evolve with real-world events. When Coca-Cola reports earnings or new global news breaks, your Narrative updates automatically, so you always have the most relevant valuation.

For example, one investor might focus on resilient cash flows post-rate cuts and see a fair value near $89.90, justifying a bullish stance, while another may emphasize regulatory headwinds or changing consumer preferences and view the stock as fairly valued closer to $67.50.

For Coca-Cola, however, we'll make it really easy for you with previews of two leading Coca-Cola Narratives:

🐂 Coca-Cola Bull Case

Fair Value: $71.00

Current Price Discount: 2.73% undervalued

Projected Revenue Growth: 6.64%

Coca-Cola’s defensive business model and over 60 years of dividend increases make it attractive for income-focused investors, especially during economic uncertainty. Global trends toward health-focused beverages and strategic moves into emerging markets offer growth opportunities but also present new risks from regulation and local competition. The narrative expects sustainable mid-20s profit margins and ongoing buybacks, supporting a stable valuation and a fair value estimate of $71 per share. 🐻 Coca-Cola Bear Case

Fair Value: $67.50

Current Price Premium: 2.31% overvalued

Projected Revenue Growth: 5.23%

Lower Fed rates lift Coca-Cola’s long-term valuation, but even modest rate changes create noticeable swings in intrinsic value estimates. KO’s premium net margins and steady free cash flow justify some valuation uplift, but slower long-term growth and regulation may limit upside potential. This scenario views the stock as fairly priced or even slightly expensive at current levels, with a defensive yield but limited capital appreciation.

Do you think there's more to the story for Coca-Cola? Head over to our Community to see what others are saying!NYSE:KO Community Fair Values as at Nov 2025

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include KO.

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