In a strategic move to expand its presence in the alcoholic beverage market, Coca-Cola (NYSE:KO) is partnering with Pernod Ricard (EPA:PERP) (OTHEROTC:PRNDY) to introduce a new ready-to-drink cocktail. The product, an Absolut vodka and Sprite cocktail, is set to debut in early 2024 in select European countries, including the U.K., the Netherlands, Spain, and Germany.
The collaboration marks a first between the two beverage giants and follows Coca-Cola's previous partnership with Brown-Forman Corporation (NYSE:BF.B) to introduce a ready-to-drink cocktail in Mexico and the U.S. This expansion into the alcohol sector aligns with Coca-Cola's ongoing strategy to become a comprehensive beverage company, as confirmed by CEO James Quincey on Monday.
According to InvestingPro data, Coca-Cola's market cap stands at a robust 230.92B USD with a P/E ratio of 22. The company has also shown promising revenue growth, with an increase of 6.82% in the last twelve months (LTM2023.Q2). Notably, Coca-Cola has a track record of providing high returns on invested capital and has raised its dividend for 52 consecutive years, as highlighted in the InvestingPro Tips.
The new cocktail will come in two variants: a regular version and a Sprite Zero Sugar version. The regular cocktail will contain around 5% alcohol content, though this may vary due to market conditions.
On the other hand, Pernod Ricard, with a market cap of 42533.22M USD, has shown a revenue growth of 13.42 % in the last twelve months (LTM2023.Q4). The company has consistently increased its earnings per share and has maintained dividend payments for 32 consecutive years, as per InvestingPro Tips.
Wall Street analysts have given a strong buy consensus to KO stock, forecasting a 24.11% upside potential with an average price target of $66.23 per share. This positive outlook reflects the market's anticipation of Coca-Cola's strategic expansion into the profitable spirits market. The company's stock is currently trading near its 52-week low, which, according to InvestingPro Tips, could be an opportune time for investors to consider adding it to their portfolio.
For more insights like these, investors can consider InvestingPro, which offers a wealth of tips and real-time metrics on companies like Coca-Cola and Pernod Ricard.
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