Coca-Cola Fair Value
What is the fair value of Coca-Cola?
As of 2025-05-11, the Fair Value of Coca-Cola Co (KO) is 12.53 USD. This value is based on the Peter Lynch's Fair Value formula. With the current market price of 70.52 USD, the upside of Coca-Cola Co is -82.2%.
Is Coca-Cola a good investment?
With the market price of 70.52 USD and our fair value calculation, Coca-Cola Co (KO) is not a good investment. Investing in Coca-Cola stocks now will result in a potential loss of 82.2%.
Peter Lynch's formula is:
The earnings growth rate we use in the formula is the average growth rate of net income/earnings over the last 5 years. If the average growth rate is smaller than 5%, we set it to 5%. If it is larger than 25%, we set it to 25%. If the TTM EPS is negative, Peter Lynch Fair Value's result can be unreliable.
| Historical Earnings | ||||||
| 12-2020 | 12-2021 | 12-2022 | 12-2023 | 12-2024 | 5Y Avg | |
| Net income | 7,747 | 9,771 | 9,542 | 10,714 | 10,631 | 9,681 |
| YoY growth | -13.2% | 26.1% | -2.3% | 12.3% | -0.8% | 4.4% |
| Market Cap (mil) | 303,518 |
| P/E | 28.1x |
| Forward P/E | 27x |
| EPS | 2.51 |
| Avg earnings growth rate | 4.4% |
| TTM earnings | 10,784 |
Peter Lynch is one of the most legendary investors/fund managers of all time. His philosophy for stock investing is very simple and straightforward: he invests in stocks that are undervalued, meaning its P/E is less than or equal to its earnings growth rate. He believes that if a stock is trading at its fair value, the PEG ratio, which was also invented by him, should be 1.
Therefore, his formula to determine a company's fair value is:
Peter Lynch Fair Value = Earnings Growth Rate * EPS * PEG
PEG is set to 1 so we can ignore it in the calculation. Based on the formula, if the earnings growth rate of a company is 15%, Peter Lynch is willing to buy its share up to P/E = 15.