Is The Coca-Cola Company (KO) overvalued or undervalued?
Updated Nov 10, 2026 · hand-researched model · educational, not advice
At a recent price of $96.03, The Coca-Cola Company (KO) trades 80% above TickerWorth's blended fair value of $53.21 per share — a discounted-cash-flow model cross-checked against peer multiples and asset value — meaning the market currently prices KO overvalued vs our estimate of what the business is intrinsically worth. Our fair value sits below the market, an implied -44.6% move to close the gap if the business performs in line with our assumptions. This is an educational model, not a price target or a recommendation — the value moves with the inputs, which you can test yourself using the WACC slider below.
One of the lenses behind that blended figure is a discounted-cash-flow model, which on its own values KO at about $66.27 per share. The rest of this page walks through that DCF — its assumptions, reverse-DCF and discount-rate sensitivity — because it is the auditable anchor of the blend.
The valuation discounts The Coca-Cola Company's projected free cash flows at a weighted-average cost of capital (WACC) of 7.3%, with a long-run terminal growth rate of 2.5%. About 80% of the enterprise value comes from the terminal value — the portion beyond the explicit forecast window — which is typical for a stable, cash-generative business and a reminder that small changes in the discount rate or terminal growth assumption swing the intrinsic value meaningfully.
Running the DCF in reverse — solving for the growth the current price already assumes — the market is implying roughly 9.3% annual revenue growth for KO. Our base case instead compounds to about 3.2% a year over the same forecast, so the market is pricing in materially faster growth than our base case. The reverse-DCF is a quick sanity check: it reframes 'is this stock cheap?' as 'do I believe the growth the price requires?' rather than arguing over a single point estimate of fair value.
Sensitivity matters more than any single number. Across a reasonable band of discount-rate assumptions, KO's modeled DCF value ranges from about $46.21 to $129.93 per share. If that range still sits below today's price, the market is optimistic relative to the model across the whole band; if it brackets the price, the stock is roughly fairly valued on our assumptions. Use the interactive slider to see exactly where your own cost-of-capital view lands.
How to read this page: the DCF fair value is what The Coca-Cola Company would be worth if its cash flows grow as modeled and are discounted at the stated WACC. The assumptions table shows every input and its source; the reverse-DCF shows what the market believes; the sensitivity band shows how fragile the answer is. None of this is investment advice — it is a transparent, auditable framework for forming your own view of KO's intrinsic value. Figures update as new filings and prices come in.
The assumptions behind KO's DCF
| Input | Value | Source |
|---|---|---|
| Base-year revenue | $47,941,000,000 | Coca-Cola FY2025 10-K (accession 0001628280-26-010047, filed 2026-02-20), Consolidated Statements of Income: Net operating revenues FY2025 $47,941M, +1.9% on FY2024's $47,061M. REPORTED vs ORGANIC — the gap is the whole story of this line: organic revenue (non-GAAP) grew 5% in FY2025, but currency took ~2 points off and refranchising (Philippines, Bangladesh and Indian bottling territories sold in 2024-25) took most of the rest. This model is built on REPORTED dollars, because reported dollars are what get discounted; organic growth enters only through the Year-1 bridge in forecast.revenue_growth. The base INCLUDES the Africa bottler (CCBA), which has been 'held for sale' since Q4 2025 but is still consolidated — its removal is modelled in Year 2, not here. CROSS-CHECK: H1 2026 revenue $25,852M, +9.2% on H1 2025's $23,664M (inflated by six extra days in Q1 2026, which reverse in Q4); Q2 alone $13,380M, +7%. |
| Base EBIT margin | 28.7% | Coca-Cola FY2025 10-K (accession 0001628280-26-010047): GAAP operating income $13,762M / $47,941M = 28.71%. Depressed by $1,261M of 'other operating charges', of which $960M is a NON-CASH impairment of the BODYARMOR trademark. Comparable operating margin (non-GAAP, Q4 release) was 31.24%. EBIT here EXCLUDES equity income from bottlers and Monster ($2,031M in FY2025), interest income, and the ~$1B of gains in 'other income' — the bottler stakes are valued separately at market in market.net_debt, so leaving their income out of EBIT is what stops it being counted twice. CROSS-CHECK: H1 2026 GAAP operating margin 34.93% ($9,031M / $25,852M), comparable 35.05% vs 34.28% a year earlier. KO's margin is strongly seasonal — Q4 2025 comparable margin was only 24.4% — so the first half overstates the full year. This base figure is used only for the engine's peak-margin test; the valuation runs off the forecast margins. |
| Forecast revenue growth | 4% → 0% → 4% → 4% → 4% | Assumption — TickerWorth's 5-year explicit forecast |
| Risk-free rate | 5.2% | US 10Y Treasury constant maturity (FRED DGS10): 5.24% on 2026-10-01, the latest published observation. Shared by every model in this tracker. |
| Beta | 0.47 | Assumption — Yahoo Finance 5Y-monthly beta via yfinance (0.342, read 2026-10-03) + own 10-year monthly regression vs S&P 500: NORMALIZED UP from the published 0.342 to 0.47 — CONSERVATIVE: it raises the discount rate and LOWERS the value. Reason, stated rather than felt: at 0.342 KO's cost of equity would be 6.95%, barely 105bp above the ~5.9% KO would pay on a new bond. Equity holders sit behind bondholders and cannot sensibly be priced to earn almost the same. The published figure is low because the 5-year monthly window (60 points) is dominated by 2022, when staples rose while the market fell — my own 5Y-monthly regression gives 0.295 and a 2-year weekly one 0.12, so the measured number is unstable rather than informative. 0.47 is my 10-year monthly regression of KO against the S&P 500 (120 points, Oct-2016 to Sep-2026, yfinance total-return closes), which spans more than one regime; the Blume-adjusted published beta would be 0.56. Each 0.1 of beta is worth roughly $6.60/share; the published 0.342 would give $74.76. |
| Terminal growth | 2.5% | Assumption — house default: House default 2.5% (roughly long-run nominal GDP), kept for comparability with every other company in this tracker. For KO it is if anything a little LOW in nominal local-currency terms (organic growth has run 4-6% for years on volume plus pricing in emerging markets) and about right in DOLLARS once the long-run currency drag is netted off — the model is in dollars. 2.0% takes ~$4.90/share off ($61.34); 3.0% adds ~$6.10 ($72.35). The price needs ~3.8% forever. Must remain < WACC of 7.29%. |
| Diluted shares | 4,313M | Coca-Cola Q2 2026 earnings release, 8-K Ex-99.1 (accession 0001628280-26-049922); same figure in the Q2 10-Q: Average shares outstanding assuming dilution, Q2 2026 (three months to 2026-07-03): 4,313M (basic 4,303M + 10M dilutive). H1 2026 also 4,313M; FY2025 4,313M. The count is FLAT: buybacks ($663M in H1 2026, $746M in FY2025) roughly offset stock issued to employees. Shares outstanding were 4,302.5M per the latest yfinance read. |
| Market price | $96.03 | Delayed quote · as of 2026-11-10 05:53 UTC |
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