Coca-Cola Just Hit an All-Time High After Surpassing $90 a Share. History Says This Is What Happens Next.

There is a lot to like about Coca-Cola (NYSE: KO) as a business. But investors have to juxtapose the business they are buying against the price they are paying. To paraphrase famous value investor Benjamin Graham (the man who helped train Warren Buffett), paying too much for a good company can turn it into a bad investment. Here's what you need to know about Coca-Cola as the stock reaches new all-time highs.

Coca-Cola is on a run!

Coca-Cola, one of the world's largest consumer staples companies, has seen its stock price rise around 30% so far in 2026 as of this writing. By comparison, the S&P 500 index (SNPINDEX: ^GSPC) is up "only" 12%. To be fair, Coca-Cola is doing fairly well right now as a business, so the strong stock performance isn't unexpected. Notably, in the second quarter of 2026, Coca-Cola's organic sales growth was 6% compared to PepsiCo's (NASDAQ: PEP) slim 1.3%. Investors are simply buying into a strong story with Coca-Cola.

Image source: Getty Images.

However, after such a rapid stock advance, Coca-Cola's stock looks a little expensive. The price-to-sales, price-to-earnings, and price-to-book ratios are all above their five-year averages. If you have a value bias, you probably won't find the stock all that interesting right now. But there's another fact that you should consider, and the P/E ratio winds up being pretty telling.

There is likely to be a better time to buy

Before getting into the weeds, it is important to note that buying Coca-Cola at an all-time high like today wouldn't be a massive mistake. Given the company's long history of growth, if you buy and hold for the long term, you'll likely end up OK. However, notice that the line in the graph below isn't straight. It is a zig-zag, which is just how stocks behave.

KO data by YCharts

Over the last few years, when Coca-Cola's stock price has risen sharply, it has pulled back before moving higher again. It appears that a P/E ratio in the high 20x range triggers investors to get worried about the valuation. And that happens to be where the P/E is right now, at roughly 27x. There's no way to know if this pattern will repeat itself, but trees also don't grow to the sky. So investors aren't going to pay an unlimited amount of money to buy a share, either. In other words, if you are patient, you can probably get a better entry point with Coca-Cola.

Coca-Cola is definitely worth the wait

If you just have to buy Coca-Cola today, it isn't the end of the world. It is a very well-run business, highlighted by its status as a Dividend King, with over 50 consecutive annual dividend increases backing its 2.3% yield. But, as Graham noted, overpaying for a good company can hamper your long-term returns. A better option for investors right now would be to keep this iconic beverage giant on their wish list.

When the P/E ratio gets into the lower 20x range, you'll want to take a second look. Over the past few years, that has proven to be a far better buying opportunity. The pattern of selling off after reaching a P/E in the high 20x range and rebounding after falling to the low 20x P/E range could repeat simply because of a mood shift among investors or if Coca-Cola's organic growth misses expectations, even by just a little bit (investors can be shockingly unforgiving at times). But you should prepare to act now, so you'll have the wherewithal to buy this well-run company when other investors are selling. If history is any guide, Dividend King Coca-Cola will overcome any short-term headwinds it faces and continue to grow over the long term.

Reuben Gregg Brewer has positions in PepsiCo. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.