Coca-Cola gains on Q4 profit beat as market recedes on Trump tariffs

• Coca-Cola stock was lifted by is Q4 results on Tuesday.
• Shares rode nearly 4% higher on the back of better organic growth.
• KO stock leads with bearish Gravestone Doji despite gains.
• The European Union said it would respond in kind to Trump's levies on aluminum, steel.

Coca-Cola (KO) stock traipsed 3.7% higher on Tuesday morning on the back of a solid fourth-quarter earnings beat that showed considerable organic growth at the softdrink leader. Additionally, management unveiled a 2025 outlook that guided for continued global growth.

Simultaneously, the broader market is in moderate decline after President Donald Trump signed an order late Monday to impose 25% tariffs on all steel and aluminum imported to the US. The European Union on Tuesday responded with promises to return the favor, sparking fears of a broader trade war.

The Dow Jones Industrial Average (DJIA), which includes Coca-Cola as a constituent, shed 0.3% in the morning session, and the S&P 500 and NASDAQ were in close alignment.

Coca-Cola earnings news

Coca-Cola reported fourth-quarter adjusted earnings per share of $0.55, 3 cents or 6% above the average forecast on Wall Street.

Revenue of $11.5 billion showed annual growth nearing 7% and was $800 million ahead of the Street’s consensus. Adjusted organic revenues expanded 14% from a year earlier. Global unit case volume rose 2%, whereas analysts had expected a slight decline.

That organic revenue growth should, however, recede to 5% or 6% in 2025, says management, due partially to currency headwinds and other structural impacts.

Those same currency headwinds are expected to push 2025 currency neutral earnings growth of 8%-10% to 2%-3% on a comparable EPS basis. The market isn’t surprised by this discrepancy, however, since many other companies are guiding for the same currency headwinds.

Coca-Cola’s fourth-quarter results come at the end of a difficult period for the company. Full-year cash flow from operations fell 41% to $6.8 billion, while adjusted free cash flow plunged 51% to $4.7 billion. Excluding certain provisions, Coca-Cola is guiding for free cash flow of $9.5 billion in 2025.

Coca-Cola stock forecast

Coca-Cola stock has thus far concocted a dreaded Gravestone Doji as a daily candlestick. Tuesday's session is not yet over, but the price action thus far tells us to sell. Initial excitement over the softdrink maker's earnings sent shares up to $67.64, a level shareholders hadn't seen since late October of last year.

But the long wick on top tells us that traders booked their profits and don't expect the rally to continue. This doesn't mean that KO stock will necessarily traipse back to support at $61, but it does throw cold water on hopes of retaking the prior $69 support level.

More evidence that the current downtrend might continue is that the moving averages are inverted. The 200-day Simple Moving Average (SMA) is trending above the 100-day, which in turn is well above the 50-day counterpart. This tells us that there is a lack of confidence undergirding the Coca-Cola share price.

KO daily stock chart