OP-1A – Power Point Presentation Example - PowerPoint PPT Presentation

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OP-1A – Power Point Presentation Example

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  1. OP-1A – Power Point Presentation Example

  2. Coke is it! Craig Bench: Example of a Company Presentation

  3. Coke is it! • Coca-Cola is the world’s top soft drink producer • They manufacture, distribute and market over 300 different nonalcoholic beverage concentrates--primarily soft drinks, syrups, juices and juice drinks--in over 200 countries • Coke leaves the capital-intensive job of bottling to flagship bottlers in various parts of the world • Nearly 2% of the daily global fluid intake involves Coke products

  4. Coke is a Buy • I am assigning Coke a “Buy” Rating

  5. Positive Factors • The stock price of $55.71 (3/26) reflects some of the poorest sales growth is recent history • As global outlook improves, sales will rebound • Coke has had historical volume growth trends of 6-7% over the last 50 years • I expect a return to normal levels • Coca-Cola enjoys unrivaled global brand recognition • BusinessWeek 2001 Survey rates them high • It is a powerful global leveraging tool

  6. Positive Factors • Coca-Cola is well diversified • They are diversified in both their beverage portfolio (over 300 brands) and in their global market penetration • Douglas Daft, CEO, has pushed global “Get Local” initiatives • In Mexico, the “Senzao” brand is a prime example

  7. Positive Factors • Their Expansion into China has been Successful • Coca-Cola has successfully expanded their penetration efforts into the crucial Chinese market • China recently became Coke’s 6th largest market, up from 16th just ten years ago • Coca-Cola’s Chinese volume has expanded 24% annually for the last ten years and the company enjoys a 48% market share of the CSD (carbonated soft drink) market

  8. Valuation Support of “Buy” Rating • Price (3/25/02): $55.71 • Market Value ($millions): $117,262 • Forward (2002) P/E: 32.8x • Premium (Discount) to market P/E: 4% • Premium (Discount) to Index P/E: (10%) • Company Type: Stalwart • PE Relative Fair Value Range: 1.5-1.8 • Intrinsic Value: $70.49 (26.5%) • Recommendation: Buy

  9. Valuation Support of “Buy” Rating

  10. Negative Factors • Coca-Cola has lagged in brand development of growing non-core CSD market • In Water, Isotonic, and Juices it has under-performed • Pepsi holds market share in U.S. in each category • Coca-Cola concentrates too much of their business in core CSD’s • While most companies are increasing their allocation of non-core CSD’s, Coca-Cola has chosen keep most of its eggs in the same CSD basket

  11. Negative Factors • Products are sensitive to the economic cycle • Consumers tend to cut the fat out of their budgets when times are lean, and Coke products are definitely fatty • Key is the example from Germany

  12. Earnings Estimates 12/02 12/03 date Craig Bench 1.74 1.82 3/26 Goldman Sachs 1.80 2.00 3/26 Prudential Securities 1.78 1.92 3/26 Zachs Mean (std. Dev) 1.78(.02) 1.97(.03) 3/26

  13. Questions? • Any Questions?