Coca-Cola Stock Recently Hit a New All-Time High. Has It Gotten Too Expensive?

Coca-Cola (NYSE: KO) is flying high this year, with its shares up an impressive 25% thus far in 2026. That's considerably better than the S&P 500, as the broad market index is up 13%, which is above average. It puts into perspective just how exceptional Coca-Cola's stock has been of late. It also recently hit a new all-time high.

What's behind the surge in value, and is Coca-Cola stock still a good buy right now, or could it be approaching a peak?

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Its growth rate hasn't been all that impressive

Coca-Cola's business has been generating decent growth this year, but it's a far cry from how it was doing in years past, when its growth rate was higher as the business was raising prices due to inflation. But at around 6%, its recent growth rate remains in line with what it has averaged over the past five years.

KO Revenue (Quarterly YoY Growth) data by YCharts

This isn't the type of chart that screams growth, or that would explain why Coca-Cola's stock has been such a hot buy. For the full year ahead, the company is forecasting an organic growth rate of around 5%. While that's solid, it's hard to suggest that warrants the beverage stock trading at record levels.

What I believe may be happening is that investors are turning to safe-haven stocks, with Coca-Cola being perhaps one of the most iconic stocks to fall into that category. Its business is safe, highly profitable, and it also pays a great dividend that yields 2.4% and that it has been increasing for decades.

Coca-Cola's stock looks wildly overpriced

Great companies don't always make for great stocks to buy. That's how I feel about Coca-Cola stock today. Although the business is doing well, the stock itself isn't worth paying the 26 times earnings it's trading at right now. Another downside with buying the stock is that because it has risen so much this year, its yield has come down and isn't as attractive as it has been in the past. There are many other higher-yielding stocks that can make for better buys.

Ultimately, there isn't a compelling reason to buy Coca-Cola stock, given its current valuation. This is a stock that historically hasn't generated strong annual returns, and the risk is that buying it at these levels could set investors up for losses in the future. While there's nothing wrong with Coca-Cola's business, the stock just isn't a good buy.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.