As stocks continue rebounding this year, some folks may be inclined to prepare for a bit of a pullback. However, whether we hit a full correction (10% drop) from this year’s highs remains a complete mystery. Regardless, it’s not a bad idea to rotate into more defensive plays (think beverage stock with Strong Buy ratings) that may be in a spot to perform well in the second half, even without more help from the S&P 500’s (SPX) mega-cap tech titans.
Certain beverage stocks may not be rich in growth. However, they can have sizeable moats and fare well, even when economic challenges surge. With a recession possibly ahead of us, I’d argue these three Strong Buy-rated beverage stocks are prudent bets right here.
Therefore, let’s check in with TipRanks’ Comparison Tool to gauge the risk/reward of the following highly-touted non-alcoholic beverage stocks.
Coca-Cola is the fizzy cola maker we all know and love. Many of us may have a case in our fridges right now. Indeed, a lot of cola lovers reach for Coke without thinking twice, even with a large number of cheaper generics. Undoubtedly, high inflation has been hurting our buying power for well over a year now. Still, Coke has held its own in impressive fashion against cheaper rivals. That’s a testament to Coke’s brand power. It really hasn’t lost its fizz with consumers, and for this reason, I remain bullish.
Private labels have been incredibly hot among consumers seeking ways to cut down on their weekly grocery bills. Though there are savings to be had by going from Coke to generic cola, the dollar or so in savings has clearly not been worthwhile. Even if Coke shares have gone flat (at least for the past year and a half), I find the stock to be a reasonably-valued way to fend off inflation.
The stock trades at 23.1 times trailing price-to-earnings, well below the 30.3 times non-alcoholic beverage industry average. With unmatched brand power and a 3.07% dividend yield, KO stock looks to sport an attractive price of admission ahead of a potential downturn year.
Even if Coke’s push into sports beverages doesn’t pay off, it boasts cash flows that are resilient and time-tested.
What is the Price Target for KO Stock?
Coke comes in at a Strong Buy, with 13 Buys and three Sells assigned in the past three months. The average KO stock price target of $70.25 implies 17.55% upside potential from here.
Vita Coco is a relative newcomer to the public markets, having landed in the back half of 2021. Unlike most other newly-listed stocks, Vita Coco has returned a great deal to investors who stuck with the name over the past year and a half.
Over the past year, shares have rocketed 128%, with 86% of the gains coming in 2023. The $1.43 billion coconut water company may be hot, but analysts still think there are more gains to be had. I’m inclined to agree and am taking a bullish stance.
Natural coconut water is a delicious, healthy alternative to sugary sodas. Indeed, Vita Coco is one of the companies that has really made the most of the opportunity at hand. The firm has been running hot on the back of an impressive quarterly earnings beat that saw $0.12 in EPS, comfortably ahead of the $0.07 EPS consensus. The margin expansion story has also been remarkable and has helped COCO stock become one of the more prosperous recent IPOs in recent memory.
For Fiscal 2023, Coco’s managers expect gross margins in the 32%-34% range (currently 26.7% for the last 12 months), thanks to a combination of factors, including higher prices and other efficiencies. Like Coke, Vita Coco looks to have impressive brand power.
What is the Price Target for COCO Stock?
Coco sports a Strong Buy rating comprised of three Buys and one Hold. The average COCO stock price target of $27.67 entails 10% upside potential.
Celsius Holdings is an $11.4 billion company behind the flagship functional energy drink Celsius. The stock recently broke through to a new all-time high of around $154 per share, thanks in part to a massive first-quarter earnings beat, which saw EPS more than double the consensus ($0.40 vs. $0.19 expected). Undoubtedly, analysts underestimated the potential of the energy-packed beverage maker, and it’s hard to bet against the stock as it looks to build on recent strength. As such, I have to be bullish.
Many analysts have been in a rush to upgrade stocks of late. The company is expected to release its second-quarter results on August 7, 2023. Bank of America (NYSE:BAC) analyst Jonathan Keypour thinks Celsius’ Q2 will see even more strength, calling for an impressive 73% in growth year-over-year alongside a respectable gross margin of 42%.
Undoubtedly, analyst expectations have been revised higher, and though it will be harder to top earnings by such a magnitude once again, I do think Celsius stock’s rally can keep turning up the temperature as it looks to take share in the energy drink space.
What is the Price Target for CELH Stock?
Celcius is a Strong Buy, with 10 unanimous Buy ratings. The average CELH stock price target of $155.78 entails a 6.7% gain from here.
Conclusion
Beverage stocks are holding their own and could maintain strength going into a recession. Out of the three companies mentioned above, analysts think KO stock sports the most upside potential from current levels (around 17.6%).
Bagikan Berita Ini
0 Response to "3 Strong-Buy-Rated Beverage Stocks with Energy to Run Higher - TipRanks"
Post a Comment