Distance Runners: KO - Long runway for a global consumer compounder

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Distance Runners: KO - Long runway for a global consumer compounder

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Distance Runners

KO - Long runway for a global consumer

compounder

Company Update

Going the distance: KO as a multi-year investment story 21 May 2026

As part of BofA’s “Distance Runners” series, we highlight The Coca-Cola Company (KO) Equity

as a multi-year global consumer compounder with significant runway as it delivers on its Global

“all weather strategy” to create new beverage occasions and drive hydration globally. We Industrials/Multi-Industry

highlight 10 reasons why KO stands out with valuation upside over the long term Peter T. Galbo, CFA

(Exhibit 3). We maintain our Buy rating and $90 PO. Research Analyst

BofAS

Refranchising supports margins & valuation upside +1peter.galbo@bofa.com646 743 0175

KO’s refranchising effort is near completion after more than a decade, marking a full Christian Junquera

shift to an asset light model. In our view, this signals an important inflection point in ResearchBofAS Analyst

how the company should be viewed and valued. Increasingly, the investment case +1 646 855 5195

christian.junquera@bofa.com

centers on brand strength and marketing efficiency, attributes that align KO more

closely with asset light models in the restaurant & hospitality sectors (MCD, MAR and

HLT, currently trading 28x vs KO 23x). This transition is becoming clearer as KO

continues to shrink its remaining bottling operations. Post the CCBA sale, bottling will

represent just ~5% of sales vs 52% in 2015. Furthermore, we estimate that the full CCBA = Coca-Cola Beverages Africa

removal of CCBA and HCCB could drive ~290bps of structural operating margin HCCB = Hindustan Coca-Cola Beverages

expansion (See Exhibit 1).

Balanced algo, Flavor leadership, & Zero Sugar dominance