Soda Is Back! Is Now the Time to Buy Coca-Cola Stock?
Key Points
Long a pricing story, Coca-Cola's Q1 2026 results were driven by volume increases.
The company saw strength across regions.
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Soda is back, with the beverage seeing a resurgence helped by the growing popularity of dirty sodas (sodas mixed with flavored syrups and cream), zero-sugar offerings, and prebiotic alternatives. Meanwhile, this was on full display when Coca-Cola (NYSE: KO) reported its Q1 2026 results.
Coca-Cola has long been a pricing power story, but now, with soda's regained popularity, it's seeing increased volumes, as well. This helped lead the company to see a 12% jump in revenue to $12.47 billion, with organic sales up 10%. That topped the $12.24 billion consensus, as compiled by LSEG.
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Its revenue was driven by an 8% increase in concentrate sales and 2% growth in price/mix. Meanwhile, unit case volumes rose by 3%, led by the U.S., China, and India. Coca-Cola Zero Sugar was particularly strong, with sales up 13%. Water sales were also notable, up 5%, while tea sales climbed 8%.
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Results were strong across multiple regions. Concentrate sales jumped 11% in North America, while unit case volumes climbed by 4%. Price/mix added 1% growth. The company said its strength was broad-based across its beverage portfolio.
Prices/mix in Europe, Middle East, and Africa (EMEA) rose by 5%, with unit volumes up 2% and concentrate sales climbing 5%. Latin America saw concentrate sales rise 7% with price/mix edging up 1%, and unit volumes up 1%. Asia Pacific saw price/mix decline 6% due to an unfavorable product mix (meaning customers were buying cheaper Coca Cola products) and affordability measures. However, unit volumes climbed 5%, and concentrate sales jumped 10%.
Adjusted earnings per share (EPS) increased by 18% to $0.86, topping the $0.81 consensus.
|
Region |
Price/Mix Growth |
Case Volume Growth |
Concentrate Sales Growth |
Organic Revenue Growth |
Revenue Growth |
|---|---|---|---|---|---|
|
North America |
1% |
4% |
11% |
12% |
12% |
|
EMEA |
5% |
2% |
5% |
11% |
13% |
|
Latin America |
1% |
1% |
7% |
9% |
14% |
|
Asia Pacific |
(6%) |
5% |
10% |
5% |
6% |
|
Overall |
2% |
3% |
8% |
10% |
12% |
Data source: Company filings and press releases.
Looking ahead, Coca-Cola maintained its full-year forecast. It expects organic revenue to grow by 4% to 5% in 2025, and adjusted EPS to increase by 2% to 3%, or 8% to 9%, excluding currency impacts to $3. It is expected to generate $12.2 billion in free cash flow.
Is Coca-Cola stock a buy?
Over the past few years, Coca-Cola's results have largely been driven by price increases, so it's refreshing to see that last quarter was led by volume growth. Coca-Cola is primarily a seller of syrup concentrate, giving the company a great, high-margin compounding business model. This is why the stock is a favorite of famed investor Warren Buffett.
Trading at around a forward price-to-earnings ratio of 24, the stock is valued around recent historical levels. With volumes starting to pick up, now could be a great time to jump into the name.
Should you buy stock in Coca-Cola right now?
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Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool recommends London Stock Exchange Group Plc. The Motley Fool has a disclosure policy.
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