%20Stock%20Prior%20to%20Its%20Earnings%20Release){kind=link}
Steps to Trade CoStar Group (KO) Stock Prior to Its Earnings Release
Coke's About to Dish Out Earnings, Here's What You Need to Know
Prepare yourself, Coca-Cola (NYSE:KO) shareholders, as the company is set to unveil its earnings on Tuesday, April 29, 2025. With a whopping $316 billion market cap, it's clear that the beverage giant has been brewing up some serious numbers. Over the past year, it generated a colossal $47 billion in revenue. Operationally, Coca-Cola's been crushing it, racking up an impressive $14 billion in operating profits and $11 billion in net income.
Analysts are forecasting earnings of $0.72 per share, coupled with $11.17 billion in sales. However, this isn't exactly groundbreaking since the same quarter last year saw the same earnings and sales figures. Nevertheless, the stock's reaction will hinge on the results and outlook compared to these estimates.
If you're an event-driven investor, you've got two options:
- Jump the gun and position yourself before the announcement based on historical trends, or
- Wait till after the announcement and then initiate a trade based on the correlation between immediate and medium-term post-earnings returns.
Historically, Coca-Cola's stock has shown a penchant for positive one-day returns after approximately 70% of earnings announcements over the past five years. This has resulted in a median gain of 1.5% and a jaw-dropping maximum one-day increase of 4.7%.
If you're hoping for gains with less volatility than individual stocks, the Trefis High Quality portfolio might be worth a peek. Since its inception, this bad boy has outshone the S&P 500 and boasted returns that have exceeded 91%.
The Skinny on Coca-Cola's Historical Odds
Here's a lowdown on one-day post-earnings returns:
- Over the last five years, there have been 17 earnings data points, with 71% of them (12) registering positive one-day returns and a measly 29% (5) showing negative returns.
- For the last three years, the positive one-day returns percentage dropped to 64%.
- Positive one-day returns averaged 1.5%, while negative ones came in at -0.6%.
Take a gander at the table below for insights on 5-day and 21-day returns post-earnings.
1D, 5D, and 21D Return Connection
A relatively safer (albeit less exciting) strategy (but only if the correlation is strong) is to examine the correlation between short-term and medium-term returns following earnings, pick a duo with the highest correlation, and execute the corresponding trade. For instance, if 1D and 5D have the highest correlation, a trader can go long for the following 5 days if the 1D post-earnings return is positive.
Unfortunately, we don't have specific correlation data on 1D, 5D, and 21D post-earnings returns for Coca-Cola's stock. To derive this data, analysts would typically study historical earnings announcements and stock performance over the desired timeframes, calculate returns, and then assess how these returns correlate with one another across multiple earnings events. For precise correlation calculations, financial databases or historical stock data platforms would be essential.
Preserve and Grow Wealth with Risk-Focused Quality Portfolios
Ever heard of Trefis' RV strategy? This strategy has outperformed its all-cap stocks benchmark (a combination of the S&P 500, S&P mid-cap, and Russell 2000), dishing out impressive returns for investors. If you're after upside with a more reliable experience than a stock like Coca-Cola, the High Quality portfolio is worth a glance. Since its inception, it has outperformed the S&P and snagged returns that have surpassed 91%.
- The upcoming earnings announcement by Coca-Cola (KO) on Tuesday, April 29, 2025, has shareholders on edge, with predictions of $0.72 per share and $11.17 billion in sales.
- Historically, Coca-Cola's stock has shown a tendency for positive one-day returns following approximately 70% of earnings announcements over the past five years.
- If you're a risk-focused investor, the Trefis High Quality portfolio may offer a less volatile option, with returns that have exceeded 91% since its inception.
- Unfortunately, there's no specific correlation data on one-day, five-day, and 21-day post-earnings returns for Coca-Cola's stock as of now. Analysts would usually study historical earnings announcements and stock performance to derive this data.