What Health Risk in Soda? Coca-Cola Credit Ratings Looking Positive
Coca-Cola is a Dow Jones industrial Average component with shares that have been pressured compared to the broad market. Now we have a positive ratings action from Standard & Poor's.
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The Coca-Cola Company (NYSE: KO) is a Dow Jones industrial Average component with shares that have been pressured compared to the broad market. It faces health concerns, and it does not even have the snack food business as a hedge like rival PepsiCo Inc. (NYSE: PEP). Now we have a positive ratings action from Standard & Poor’s.
24/7 Wall St. recently pondered whether Coca-Cola and Pepsi should be considered as defensive stocks now that the ongoing issues have hurt domestic case volumes so much. Now there is even a health risk that diet drinks may be worse.
S&P placed Coca-Cola’s corporate credit ratings on Credit Watch Positive, implying that an upgrade could be coming in the months ahead. S&P said:
We placed our ratings on Atlanta, Georgia-based The Coca-Cola Co., including the ‘AA-‘ long-term corporate credit rating, on CreditWatch with positive implications. … We will reassess our use of an unfavorable comparable rating analysis on the company.
S&P said that the A-1+ short-term corporate credit and commercial paper ratings are not on CreditWatch. The positive watch also shows that management has maintained a moderate financial policy and has kept its credit ratios in line with a “modest” financial risk assessment.
The ratings agency said that it plans to resolve this CreditWatch rating in the very near term, and that it could raise or leave the ratings on Coca-Cola unchanged.
So, what risk of a health scare is there really? Coca-Cola shares were down $0.02 at 2:00 p.m. EST on Wednesday, against a 52-week range of $36.83 to $43.43.
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Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.
