The Coca-Cola Company (NYSE:KO) raised its revenue and earnings outlook after rising prices drove a strong third quarter.
The Atlanta, Georgia-based soft drinks maker said net revenue in the quarter ended September grew 8% to $12.0 billion, and organic revenue grew 11%.
Revenue performance included 9% growth in price/mix and 2% growth in concentrate sales, the firm said.
Operating margin fell to 27.4% from 27.9% in the prior year primarily driven by items impacting comparability and currency headwinds.
EPS rose 9% to $0.71, and comparable EPS (non-GAAP) grew 7% to $0.74 while net income was 9.2% higher at $3.08 billion from $2.82 billion.
“We delivered an overall solid quarter and are raising our full-year topline and bottom-line guidance in light of our year-to-date performance,” said James Quincey, chairman and CEO.
“Our leading portfolio of brands, coupled with an aligned and motivated system, positions us to win in the marketplace today while also laying the groundwork for the long term.”
Looking ahead, the firm expects to deliver organic revenue (non-GAAP) growth of 10% to 11% compared to previous guidance of 8% to 9%.
Adjusted EPS is forecast to rise by 7% to 8%, versus $2.48 in 2022, up from previous predictions of 5% to 6%.
Shares rose 2.4% Tuesday afternoon to $55.38.
'Reassuring momentum'
Meanwhile, analysts at Bank of America reiterated their Buy rating and $60 price target.
"We view today's raised guidance as positive, though expected, reflecting a reassuring view on momentum through FY23, bolstered by relatively benign impacts to volume considering the upside on pricing," the analysts wrote. "On the call, we look for insight behind volume resiliency, ongoing pricing against hyperinflationary FX, as well as drivers of gross margin expansion."
The $60 target is based on "21x our FY24 EPS estimate, a 12% premium to non-alcoholic beverage peers. In our view, a premium multiple is warranted as KO topline management continues to fuel outperformance," the analysts added.
—updated to include share price and analyst commentary—