Discounted Cash Flow Analysis On Coca Cola (KO)

Click the button below to view my DCF analysis for Coca-Cola from last week.

Based on my assumptions and data, if I require a 6.80% return, the fair value I calculate for the stock is $73.73. With the current market price at $71.46, this suggests that—if my assumptions are correct and the company continues to perform—I would not only achieve my required return but also gain a little extra upside.

Investing in stocks trading below their intrinsic value is exciting because it can lead to higher long-term returns while avoiding the risks of multiple compression during economic downturns. When I have conviction in a great company, I look to market downturns as opportunities to buy more at a discount. I also prefer companies that engage in stock buybacks because they consolidate ownership and increase the value of my stake over time. While there are more complex DCF models out there, this analysis is solid enough to provide insight into what’s overvalued and what isn’t. Equity research analysts and professionals often build extensive models with multiple tabs and pages of data, but you don’t need to start there. Go at your own pace and tailor your learning to your style.

Lastly, don’t let anyone tell you that you can’t succeed at learning this stuff. With dedication and consistency, you can learn anything. If you're new to stock analysis and haven’t worked in finance before, I highly recommend Wall Street Prep—it’s a fantastic resource used by top banks, funds, and schools to train professionals in financial modeling.