StockCall Insight into Coca Cola and Dr Pepper Snapple: Emerging Markets to the Rescue

 StockCall Insight into Coca Cola and Dr Pepper Snapple: Emerging Markets to
                                  the Rescue

PR Newswire

LONDON, February 12, 2013

LONDON, February 12, 2013 /PRNewswire/ --

The consumption of soft drinks such as The Coca Cola Co.(NYSE: KO)and Dr
Pepper Snapple Group Inc. (NYSE: DPS)in the developed markets has been on a
decline consistently over the past six or seven years due to consumers
switching to healthier substitutes like juices and energy drinks. The key
revenue streams such as Europe and North America have exhibited heavy declines
in sales. The sales volume of carbonated drinks dipped nearly 2% in the USA
during last year. StockCall has issued technical analysis and charting reports
on on Coca Cola and Dr Pepper Snapple. Download these free reports now at

A quick recap on Coca Cola for 2012

To negate the industry slowdown many soft drinks companies are trying to push
up the prices in order to safeguard profit margins. In addition, giants like
Coca Cola are striving hard to promote sales of other product lines like
Powerade and Minute Maid. In 2012, Coca Cola's top-line grew by 3% to 4 %,
primarily due to the robust performance of flagship products in the emerging
markets. Sales volume grew by 15% in India; meanwhile Russia and South Africa
reported a 7% growth. Download the free research on The Coca Cola Co. today by
registering at 

Coca Cola Pre-earnings

During 2012, the gross margin of Coca Cola was at 60.5% effectively, compared
to 61.1% in 2011. Nevertheless, commodity prices have been constantly easing
over the last six months thus the cost estimate of many companies is likely to
reduce. Coca Cola corrected its incremental cost forecast to $225 million from
$300 million in the third quarter of 2012.

Coca Cola reported a collective revenue and gross profit of $49 billion and
$30 billion respectively in 2012. The current stock price is trading at $38.77
close to its 52-week low. The stock price seems undervalued as the demand from
the emerging markets will keep the revenue forecast in-line. In addition the
easing commodity prices will keep the gross profit margins healthy going
forward. There may be an upside of 5% on the Coca Cola stock.

The company reports its fiscal fourth quarter earnings today (these data were
not available at the time this article was completed).

Dr Pepper Pre-earnings

Dr Pepper Primarily operates in North America with more than 90% of its
revenue generated from US and Canada. The company reported a collective
revenue and EBITDA of $6 billion and $1.3 billion respectively in 2012. The
current stock price is trading at $ 45.73 close to the 52-week high of $46.37.
The market price seems fair as the 2012 reported revenue was in-line with the
original forecast and a potential upside of another 0.5% to 1% may be achieved
on the current stock price. Sign up and have access to our free report on Dr
Pepper Snapple Group Inc. at 

The company reports its fourth quarter 2012 earnings tomorrow, February 13^th,

Opportunity in Adversity

The increasing awareness of health related problems with excessive consumption
of carbonated drinks underpins the declining demand for soft drinks. The
overall industry sales have been on a decline from the past five or six years,
and the trend may continue. However, diversifying into other non-carbonated
product categories presents a huge opportunity for the soft drinks market. The
demand for non-carbonated drinks have been increasing constantly in Europe and
North America and increased awareness in the Asian region will drive the
market going forward. The likes of Coca cola and other key players have
already diversified into other product categories that will allow revenue
streams to be stable going forward.

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