Stock Analysis & Valuation Coca-Cola Consolidated, Inc. (0I0T.L)

• Previous Close: £150.58
• Sector Valuation Confidence Level: Low

Valuation method	Value, £	Upside, %
Artificial intelligence (AI)	80.30	-47
Intrinsic value (DCF)	60.00	-60
Graham-Dodd Method	13.80	-91
Graham Formula	61.70	-59

Strategic Investment Analysis

Company Overview

Coca-Cola Consolidated, Inc. (LSE: 0I0T.L) is a leading U.S.-based manufacturer, marketer, and distributor of nonalcoholic beverages, primarily products of The Coca-Cola Company. Headquartered in Charlotte, North Carolina, the company operates in the Consumer Defensive sector, focusing on sparkling and still beverages, including carbonated drinks, energy products, bottled water, ready-to-drink coffee and tea, enhanced water, juices, and sports drinks. Coca-Cola Consolidated serves a broad customer base, from grocery and mass merchandise stores to restaurants, schools, and recreational facilities, leveraging direct distribution and vending machine networks. The company also maintains strategic alliances, such as its partnership with EspriGas, enhancing its market reach. With a strong presence in the U.S. beverage industry, Coca-Cola Consolidated benefits from its exclusive bottling rights for Coca-Cola products, ensuring steady demand and brand loyalty. Its diversified product portfolio and extensive distribution network position it as a key player in the non-alcoholic beverage market.

Investment Summary

Coca-Cola Consolidated presents a stable investment opportunity within the non-alcoholic beverage sector, supported by its strong association with The Coca-Cola Company and a diversified product portfolio. The company's revenue of $6.9 billion and net income of $633 million in the latest fiscal year reflect robust operational performance. With a market capitalization of approximately $9.86 billion and a beta of 0.885, the stock exhibits lower volatility compared to the broader market, appealing to risk-averse investors. However, the company faces risks from intense competition, fluctuating commodity prices, and potential regulatory changes impacting sugary beverages. The dividend yield, supported by a $8 per share payout, adds to its attractiveness for income-focused investors. Investors should monitor its debt levels, which stand at $1.91 billion, and its ability to maintain profitability amid rising input costs.

Competitive Analysis

Coca-Cola Consolidated's competitive advantage stems from its exclusive bottling and distribution rights for Coca-Cola products in key U.S. markets, ensuring a steady revenue stream and brand recognition. The company's extensive distribution network, spanning retail, foodservice, and vending channels, provides a significant edge over smaller competitors. Its strategic alliances, such as the partnership with EspriGas, further enhance its market penetration. However, the company operates in a highly competitive industry dominated by global giants like PepsiCo and Keurig Dr Pepper, which have broader product portfolios and greater international reach. Coca-Cola Consolidated's reliance on Coca-Cola-branded products exposes it to risks associated with brand perception and shifting consumer preferences toward healthier alternatives. While its regional focus allows for operational efficiency, it limits growth opportunities compared to multinational peers. The company's ability to innovate and expand its product offerings, particularly in the health and wellness segment, will be critical to maintaining its competitive position.

Major Competitors

• PepsiCo, Inc. (PEP): PepsiCo is a global leader in the beverage and snack industry, with a diverse portfolio including Pepsi, Gatorade, and Frito-Lay products. Its extensive international presence and strong brand equity give it a competitive edge over Coca-Cola Consolidated. However, PepsiCo's broader focus on snacks dilutes its beverage-centric growth compared to Coca-Cola Consolidated's specialized bottling operations.
• Keurig Dr Pepper Inc. (KDP): Keurig Dr Pepper combines coffee and beverage distribution, offering a unique product mix that includes Dr Pepper, Snapple, and Keurig coffee systems. Its strength lies in its dual focus on hot and cold beverages, providing diversification. However, its reliance on the U.S. market mirrors Coca-Cola Consolidated's regional concentration, limiting global scalability.
• The Coca-Cola Company (KO): The Coca-Cola Company is the parent brand and primary supplier for Coca-Cola Consolidated, controlling a vast global beverage portfolio. While Coca-Cola enjoys unparalleled brand recognition and international reach, its reliance on bottlers like Coca-Cola Consolidated for distribution creates a symbiotic relationship. Coca-Cola Consolidated benefits from this association but lacks the parent company's global diversification.
• Monster Beverage Corporation (MNST): Monster Beverage specializes in energy drinks, a high-growth segment within the non-alcoholic beverage industry. Its innovative marketing and strong youth appeal give it an edge in the energy sector. However, its narrow product focus contrasts with Coca-Cola Consolidated's diversified offerings, making it more vulnerable to shifts in energy drink demand.