One Wall Street analyst sees 16% upside for Coca-Cola stock

Coca-Cola Company (NYSE: KO)s stock price has been virtually flat for the past two and a half years, but that could change soon.

Barclays Bank (Barclays)Analyst Lauren Lieberman recently raised her firm's 12-month price target on Coca-Cola Co. from $66 to $68, giving the company 17% of upside from where the stock was trading. Lieberman rated Coca-Cola a Hold (Buy).

With the beverage giant's revenues continuing to grow over the past few years and the global soft drink market still expanding, it would be wise to buy this stock now.

Why buy Coca-Cola stock?

The Wall Street consensus expects Coca-Cola's organic (non-GAAP) revenue to be roughly flat this year. This will be down from the company's 2023 organic revenue growth target of 12%.

But Coca-Cola's strong growth last year was due to its marketing, a specialty that will come in handy as the brand seeks to gain new customers in emerging markets. The global carbonated soft drinks market is forecast to grow from $445 billion in 2022 to $630 billion in 2030, according to Zion Market Research.

Analysts at Barclays say she sees Coca-Cola stock benefiting in the near term as investors begin to look for higher value in the consumer health and beverage markets. From this point of view, Coca-Cola shares are trading at a forward price-to-earnings ratio of less than 21 times, which is lower than its average valuation of 27 times over the previous five years.

Assuming the company meets the consensus EPS estimate of $2.64 for the year, its target share price could reach $68 as set by analysts if the stock's valuation returns to its previous average.

Should you invest $1,000 in Coca-Cola now?

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John Ballard does not hold any of the shares mentioned above.The Motley Fool recommends Barclays Plc.The Motley Fool has a disclosure policy.

A Wall Street Analyst Sees 16% Upside in Coca-Cola Stock was originally published by The Motley Fool.