Coca-Cola Q1 Earnings Preview: Will Warren Buffett Favorite Continue To Be A 'Safe Haven' Stock?

Beverage giant Coca-Cola Co. (NYSE:KO) could provide investors with updated guidance given the potential impact of global tariffs when the company reports first-quarter financial results Tuesday before the market opens.

Earnings Estimates: Analysts expect Coca-Cola to report first-quarter revenue of $11.14 billion, down from $11.30 billion, according to data from Benzinga Pro.

The company has beaten analyst estimates for revenue in more than 10 straight quarters.

Analysts expect the company to report quarterly earnings per share of 72 cents, in line with the 72 cents reported in last year's first quarter.

The company has beaten analyst estimates for earnings per share in four straight quarters and in eight of the last 10 quarters overall, with the other two quarters meeting analyst estimates.

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What Experts Are Saying: Momentum for Coca-Cola could be fading with rival PepsiCo Inc (NASDAQ:PEP) and consumer staple Procter & Gamble (NYSE:PG) recently seeing shares fall after quarterly results, Freedom Capital Markets Chief Global Strategist Jay Woods warns.

"Coca-Cola shares have been a safe haven and a steady gainer during these uncertain times. Shares are up over 15.5% year-to-date, as the consumer staple giant and Warren Buffett favorite outperforms the overall market," Woods said in his weekly newsletter.

Woods said Coca-Cola stock now sits "at an interesting level" ahead of earnings with a reversal pattern formed.

"The safe trade in KO has lost momentum on each rally as seen in the lower highs of its RSI."

Woods warned that the upside move in Coca-Cola stock may have already been made and the stock could retreat to "a level between $67 and $70."

Goldman Sachs analyst Bonnie Herzog said Coca-Cola management had an optimistic outlook in March. The analyst kept a Neutral rating and $65 price target after the investor meetings.

Herzog said Coca-Cola's "all-weather" strategy is working, but highlighted the impact inflation could have for consumers with affordability a potential top-of-mind idea at grocery stores. A pullback in consumer spending is one item of concern for the Coca-Cola analyst.

Key Items to Watch: Coca-Cola's report comes after PepsiCo reported mixed first-quarter results with revenue of $17.92 billion, beating Street consensus estimates and earnings per share of $1.48, missing a $1.49 Street consensus estimate.

Both revenue and earnings per share were down year-over-year for PepsiCo in the quarter. This represented the first earnings per share miss by Pepsi in more than 10 quarters.

While looking at PepsiCo's financial results, it might be important to look at how their beverage segments performed and strip out its snack food divisions. The company saw declines for segments like PepsiCo Foods North America and Latin America Foods.

On the beverage side, PepsiCo Beverages North America had flat year-over-year sales and International Beverage Franchise segment sales were up 3% year-over-year.

Pepsi did cut its guidance after the results, which will be a key item to watch in Coca-Cola's report. Coca-Cola previously said that plans by President Donald Trump to place tariffs on aluminum could make its cost of goods more expensive.

Coca-Cola's guidance and management commentary will be closely watched by investors and analysts to see what is said about tariffs and their potential impact,

Questions during the earnings call could also start to ask the beverage company about the potential long-term impact of plans to ban color dyes in the U.S. by the Secretary of Health and Human Services Robert F. Kennedy Jr.

While Coca-Cola stock will be highly volatile on Tuesday after the earnings report, the stock could also send shares of other beverage and consumer goods up or down based on the results and commentary.

Coca-Cola is also a member of the Dow Jones Industrial Average, putting ETFs like the SPDR Dow Jones Industrial Average ETF (NYSE:DIA) into the spotlight.

Warren Buffett and Berkshire Hathaway Inc (NYSE:BRK)(NYSE:BRK) are also large shareholders of Coca-Cola stock, which could make the conglomerate company's stock a fast mover on Tuesday.

Price Action: Coca-Cola stock is trading at $71.79 on Monday morning versus a 52-week trading range of $60.62 to $74.38. The stock is up 15.8% year-to-date and up 15.4% over the last year.

Meanwhile rival PepsiCo stock trades at $134.39 Monday morning versus a 52-week trading range of $131.80 to $183.39. The stock is down 11.7% year-to-date and down 23.8% over the last year.

Read Next:

• If You Invested $1,000 In Coca-Cola Stock When Warren Buffett Did, Here’s How Much You’d Have Today

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