Shares of Coca-Cola Co (NYSE:KO) spiked in early trading on Tuesday, after the company Monday reported upbeat first-quarter results.

The company delivered an earnings beat on the back of better-than-expected organic sales, according to BofA Securities.

The Coca-Cola Analyst: Analyst Peter Galbo maintained a Buy rating and price target of $88.

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The Coca-Cola Thesis

The company reported adjusted earnings of 86 cents per share. It topped the consensus of 81 cents per share. Operating profit on better-than-expected organic sales drove the upside.

Galbo also noted "below-the-line items including net interest expense, equity income, other income and tax.”

The analyst stated the following key takeaways from Coca-Cola's results:

  • Unit case volume grew 3% year-on-year, significantly better than BofA's estimate of a 0.2% decline, with the upside being driven mainly by the Asia Pacific region, with China and India being the primary contributors.
  • Organic sales grew around 10.0% year-on-year, exceeded BofA and Street estimates of 5.8% and +6.5%, respectively.
  • Adjusted gross margin came in at 62.3%, below the BofA estimate of 63.1%.
  • Adjusted operating profit of $4.3 billion surpassed the BofA estimate of $4.1 billion.
  • Operating margin came in at 34.5%, topping BofA's forecast of 34.3%.

Management raised their currency neutral and comparable earnings growth guidance for 2026 to 6%-7% and 8%-9%, from their prior projection of 5%-6% and 7%-8%, respectively, Galbo said.

He added that the other updates to the company’s 2026 outlook include:

  • Currency tailwind to sales of 1%-2% versus prior expectation of 1%
  • Effective tax rate of 19.9% versus prior 20.9%

The analyst named Coca-Cola as a top pick for US consumer staples for 2026. "Our target multiple implies a premium to non-alcoholic beverage peers, warranted in our view by balanced and resilient organic sales growth supported by their scale and incidence pricing model which has proven to be a tested topline growth lever," he further wrote.

KO Price Action: Shares of Coca-Cola had risen by 6.02% to $80.00 at the time of publication on Tuesday.

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