Coca-Cola is named a top beverage stock pick at Morgan Stanley

Morgan Stanley called Coca-Cola Company (NYSE:KO) a top pick in the beverages sector as it reiterated an Overweight rating on the beverage stock.

Analyst Dara Mohsenian and his team see sustained organic sales growth for Coca-Cola (NYSE:KO) at a pace far above peers, aided by strong pricing power and solid historical volume growth. The company is also seen sustaining its market share gains along with a benign competitive environment. In terms of new brands, the Fairlife acquisition is seen providing a major boost.

“We see Coke as increasingly in a league of its own, with sustained MSD OSG above peers (and KO separately benefiting from a sequentially weaker dollar), given greater pricing power (Coke has earned this at the corporate level with consistent and durable market share gains, better execution, and higher/more effective marketing, and its categories/geographies support pricing power with lower private label penetration and its emerging market skew.”

In terms of valuation, Coca-Cola (KO) is seen trading at an attractive level.

Morgan Stanley has a base case price target of $81 on Coca-Cola (KO) and bull case price target of $100.00.

On Seeking Alpha, analyst Steven Fiorillo is also bullish on Coca-Cola’s (KO) upside potential. “KO’s stable dividend and growth potential make it an attractive choice for investors that want growing dividend income with capital gains in an environment where the risk-free rate of return is expected to decline.” wrote Fiorillo.