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Coca-Cola Poised for In-Line Quarterly Print Despite Global Macro Volatility, RBC Says

-- Coca-Cola's (KO) first-quarter results are likely to meet Wall Street's expectations, showing "resilience" despite a difficult global consumer environment amid war-driven concerns, RBC Capital Markets said Friday.

The brokerage expects the beverages giant to report first-quarter adjusted earnings of $0.82 a share on net sales of $12.01 billion, with organic sales growth projected at 6.7% year over year. The Street expects EPS of $0.81 on sales of $12.17 billion while looking for organic sales growth of 6.5%, RBC said in a note to clients.

"We expect the quarter to be fine, with (Coca-Cola) delivering against (consensus) numbers, showing resilience despite the difficult environment," said Nik Modi, co-head of global consumer and retail research at RBC.

The company is scheduled to report results Tuesday.

"While the Coke system continues to see good momentum on market share and top line, there is significant concern among the bottler community regarding aluminum inflation, the Midwest premium and the likely increase in logistics costs/pet packaging costs if the energy complex continues to inflate," Modi said in the note.

"While the system would normally just price for the inflation, we believe the current consumer environment might make it difficult to pull this lever right now," Modi wrote.

Broad-based inflation concerns have grown in the wake of a jump in energy prices amid the closure of the crucial Strait of Hormuz following the US-Israel war with Iran that started at the end of February. Markets are optimistic about a fresh round of talks between the US and Iran in Pakistan over the weekend.

Several international markets have implemented energy restrictions and/or conservation measures amid supply concerns arising from the Iran war. This can result in mobility restrictions and market disruptions, potentially posing risk for Coca-Cola's business in certain overseas markets, according to the note.

RBC has an outperform rating and an $87 price target on the Coca-Cola stock.

Earlier this month, beverage and snacks giant PepsiCo (PEP) reported higher-than-expected fiscal first-quarter results amid affordability initiatives while reiterating its full-year outlook.

Price: $76.60, Change: $+0.32, Percent Change: +0.42%

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