Coca-Cola (NYSE: KO) stock price has been one of the best performers in Wall Street in the last decades. It is an all-weather company that has survived the world’s extreme events like the COVID-19 pandemic, the Global Financial Crisis, and the two World Wars.

However, the company, which counts Warren Buffett as a big investor, has underperformed the market in the last decade. Its total return in the past five years stood at 54% while the S&P 500 index has risen by over 94%. 

The stock has, nonetheless, done well this year, rising by 24.3%, while the S&P 500 index has risen by 20%.

Strong revenue and profitability growth

Coca-Cola is a well-known brand that has continued to grow its revenues, profitability, and rewarding its shareholders. A dividend king, it has boosted its dividends for over 61 years, a record only a few companies have done. 

Coca-Cola’s annual revenues have continued to grow, thanks to the world’s population and economic growth. In most periods, the company is widely seen as a good barometer of the global economic growth.

Most recently, its annual revenue has jumped from over $37 billion in 2019 to over $45 billion in the last financial year. 

Analysts expect that its business will continue to do well in the coming years. Its revenue will rise to $46 billion in 2024, followed by $48.2 in 2025. Also, analysts believe that its earnings per share will rise from $2.85 this year to $3.04 in the following year. 

This profitability growth has happened even after the company went through major inflationary pressures globally.

Coca-Cola is also known for its fairly good balance sheet. It has $19 billion in cash and short-term investments against $39 billion in long-term debt. While this is a big debt burden, its maturities are spread well over a long period.

Earnings download

The most recent financial results showed that Coca-Cola’s revenue growth continued in the last quarter. 

Its second-quarter revenue rose by 3% to $12.4 billion, helped by higher prices and substantial volume increase. 

Coca-Cola also continued to grow its margins, with the operating margin coming in at 21.3%, higher than the previous 20.1%.

Another positive is that the firm continued to grow its market share in the nonalcoholic ready-to-drink industry, where its primary competitor is PepsiCo. The company expects that its full-year revenue growth will be between 9% and 10% this year.

Still, it faces several major headwinds that could affect its reported growth. One of the top headwinds is that the US dollar has retreated substantially against key currencies like the euro and sterling this year. As a result, it expects to have a currency impact of between 5% and 6%.

Valuation concerns remain

Coca-Cola is a great company with one of the best market shares in the beverage industry. Over the years, it has learnt to co-exist with Pepsi, its biggest competitor. 

However, the main concern among investors is that its valuation has remained at an elevated level in the past few months.

Its non-GAAP price-to-earnings ratio stands at 25.7, higher than the sector median of 18, and higher than its five-year average of 24.65. 

Coca-Cola’s forward P/E of 27 is also higher than the S&P 500’s 21 and the industry median of 20. It is also slightly higher than its five-year average of 25.

Companies with premium brands like Moody’s, Visa, Mastercard, and American Express always trade at a higher valuation. However, in Coca-Cola’s case, the challenge is that the revenue and profitability growth has not been all that strong.

Analysts are also seeing a limited chance for growth, with the average stock estimate being at $71.93, in par with the current price.

Coca-Cola stock price analysis

KO chart by TradingView

The weekly chart shows that the KO share price has been in a strong bull run this year. It crossed the important resistance point at $61.82, its highest swing in April, December 2022, and April 2023. By moving above that level, it invalidated the triple-top pattern that was forming.

The stock has remained above the 50-week and 200-week Exponential Moving Averages (EMA) and formed a bullish pennant pattern. In most periods, this pattern is usually followed by a bullish breakout.

Coca-Cola shares have become severely overbought, with the Relative Strength Index (RSI) moving to 75. Therefore, while the bullish trend may continue, a bearish breakout towards $61.82 cannot be ruled out. The next key date to watch will be on Oct. 23 when it publishes its financial results.

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NNN REIT’s (NNN) stock price did well in 2024, surging to its highest record level. It has risen for five consecutive months, reaching its all-time high of $49.

Its total return this year is 16.31%, higher than the Vanguard Real Estate Fund (VNQ), which has risen by 12%. NNN has also done well in the last 12 months, rising by 46% while the VNQ and the SPY ETFs have jumped by 34% and 35%, respectively.

Good REIT with catalysts

NNN is a leading company that is a real estate investment trust (REIT). It operates as a triple-net lease, where tenants handle property taxes, insurance, and maintenance. 

The benefit of this model is that the company avoids the most volatile costs that companies go through. For example, the company is less exposed to employee costs, taxes, and insurance, meaning that it has higher margins.

The other top REITs using this approach are Realty Income, W.P. Carey, Agree Realty, and Essential Properties Realty Trust. In most periods, these REITs often do better than other companies in the industry.

Their business is also easy to predict since revenues are mostly determined by rental income, acquisitions, and disposals.

NNN owns over 3,500 properties, which it leases to companies in the retail industry. Its biggest client is 7-Eleven, one of the biggest retailers in the US. The other notable tenants Mister Car Wash, Camping World, Dave & Buster, Couche-Tard, Walgreens, and United Rentals. 

Most of these are good companies with a long track record of growing sales. Some of them, however, like AMC Theatre and Walgreens, are going through a relatively rough period. Still, NNN maintains an occupancy rate of 99.3%, higher than the industry average.

By segment, most of its stores are in the automotive industry, followed by convenience stores, restaurants, family entertainment, and recreational vehicle dealers. 

NNN has done well in the past few years as its revenue has risen from over $670 million in 2019 to over$853 million in the last twelve months.

Strong financial results

The NNN stock price has done well this year, helped by its recent financial results. Revenue rose to $216 million in the second quarter, a big increase from the $206 million it made in the same period last year.

NNN’s funds from operations (FFO) rose from $144 million to $152 million, while the core FFO jumped from $144 million to $152 million.

The adjusted AFFO rose from $146 million to $153 million. For the year’s first half, revenue jumped to $432 while the FFO and AFFO jumped to $303 million and $306 million. 

FFO and AFFO are important metrics for REITs because the provide a more accurate reflection of its cash flow. It also standardises the performance of a business across the REIT industry.

NNN REIT expects its business to continue doing well, with the FFO per share rising to between $3.27 and $3.33 and the AFFO per share rising to between $3.31 and $3,37. It also expects to sell properties worth between $100 million and $120 million.

NNN REIT stock analysis

The weekly chart shows that the NNN REIT share price has been in a strong bull run in the past four years. It started going up in 2020 when it dropped to a low of $19. 

Most recently, NNN shares have flipped two key resistance levels: $44 (January 2023 high) and $46.40 (March 2020 high). 

NNN has remained above the 50-week and 200-week moving averages while the MACD and the Relative Strength Index (RSI) have continued rising.

Therefore, the stock will likely continue soaring as bulls target the next key resistance point at $50 now that the Fed has started to cut interest rates.

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The US dollar index (DXY) continued its downtrend last week as the market reflected to the Federal Reserve decision, weak consumer confidence and flash manufacturing PMI data, and falling inflation. It slipped to a low of $100.4, down by over 5.7% from its highest point this year and 12.5% below the 2022 high.

Odds of more Fed cuts rise

The main catalyst for the US dollar index retreat was the decision by the Federal Reserve to start cutting interest rates this month.

In a meeting two weeks ago, officials decided to cut rates by 0.50%, higher than what most analysts were expecting. In subsequent statements, Fed officials like Neel Kashkari and Raphael Bostic supported more rate cuts.

However, some Fed officials have called for caution and recommended that it should cut rates more gradually. In an FT interview, Alberto Musalem argued that cutting rates more aggressively risked overheating financial conditions, a move that may stimulate inflation.

Economic numbers released last week showed that the Fed has room to delivering more cuts in the next two meetings of the year.

According to S&P Global, US manufacturing remained below 45 in September and has been in that level in the past few years. As such, there are signs that the sector has reacted mildly towards President Biden’s industrial policies. 

Another report by the Conference Board showed that consumer confidence had its biggest drop in three years in September. The report revealed that many people were concerned about the rising unemployment rate in the country. 

Most importantly, there are signs that inflation was dropping. A report by the Bureau of Economic Analysis showed that the personal consumption expenditure (PCE) retreated to 2.2%, a big drop than most analysts were expectnf. 

The PCE is an important inflation gauge because, unlike the consumer price index (CPI), it looks at price changes in rural and urban centers. It is also the Fed’s preferred inflation gauge.

There are other signs that inflation will continue falling. For one, the price of crude oil has dropped, with Brent and West Texas Intermediate (WTI) falling to $71 and $68.6, respectively.

US NFP data ahead

The next important catalyst for the US dollar index will be the upcoming US nonfarm payrolls (NFP) data.

Economists expect the data to reveal that the country’s NFP came in at 144k in September, an improvement from the previous month’s 142k. The unemployment rate remained at 4.2% while the average hourly earnings rose to 3.4%.

These are crucial numbers because the Fed has shifted its focus from inflation to the labor market. As such, it hopes that these rate cuts will help to stimulate the economy, leading to more jobs, without stimulating inflation. 

Other central banks actions

The US dollar index has also been affected by the actions of other central bank decisions in the past few weeks.

The Bank of England (BoE) decided to leave interest rates unchanged at 5% in the last meeting. Other notable banks like the European Central Bank, Bank of Canada, and Swiss National Bank have all slashed rates this month. 

As a result, these currencies have strengthened significantly against the US dollar. The EUR/USD exchange rate rose to 1.1215, its highest point since July 19 last year.

Similarly, the GBP/USD pair has surged to 1.3427, its highest level since February 2022, and 29% above its lowest point in 2022. 

The Swiss franc has tumbled to 0.8400, its lowest point since December last year and 17% below the year-to-date high.

The dollar has also slipped against other emerging market currencies like the South African rand, Chinese yuan, and the Indonesian rupiah.

US dollar index analysis

DXY chart by TradingView

The weekly chart shows that the DXY index formed a double-top chart pattern at $106.40. In most periods, this is one of the highly popular bearish patterns. It has now moved slightly below the double-top’s neckline at $100.60, its lowest swing in December last year. The US dollar index has also moved below the 50% Fibonacci Retracement level at $102. 

It has also moved below the 50-week and 200-week Exponential Moving Averages (EMA) while the Percentage Price Oscillator (PPO) and the Relative Strength Index (RSI) have continued falling. Therefore, the US dollar will likely continue falling as sellers target the next key support at $989, the 61.8% retracement point.

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Private equity companies are firing on all cylinders this year, with most of them beating the S&P 500 index. TPG (NASDAQ: TPG), which went public in 2022, has risen from a record low of $20.96 to $60. It has risen by almost 50% this year, beating the likes of Carlyle, Apollo Global Management, and Brookfield.

TPG is a fast-growing PE company

TPG is a large asset management company that has grown rapidly in the past few years. It has grown both organically and through acquisitions, with the most notable buyout being Angelo Gordon, a specialist in private credit in a deal valued at over $2.7 billion.

The company does its business through five key segments like capital, growth, impact, Angela Gordon, real estate, and market solutions. These divisions had over $71 billion, $26 billion, $19 billion, $59 billion, $18 billion, $18 billion, and $8.9 billion, respectively. 

TPG has expertise in top strategies like leveraged buyouts, growth investing, credit, and real estate. 

Its annual revenues have jumped from over $1.9 billion in 2019 to over $2.7 billion in the trailing twelve months. This growth happened as the assets under management (AUM) rose from $85 billion in 2019 to $222 billion last year. It had $229 billion in assets in the last quarter, with its fee-earning assets being at $137 billion.

Read more: Carlyle Group stock is a bargain with potential catalysts

TPG earnings download

The most recent financial results showed that TPG’s business was growing. Its total revenue rose from $603 million in the second quarter of 2023 to $744 million in the last one. Its half-year revenues rose to over $1.58 billion from the previous $1.24 billion. 

The results also showed that the fee-related earnings (FRE) rose to $201 million from $125 million in the same period last year. 

Additionally, the company continued to boost its balance sheet, with the amount of cash in its balance sheet rising to over $1.1 billion and its investments growing to $6.9 billion. This cash increased after the company raised $1.1 billion through Senior and Subordinated notes.

Analystss believe that TPG’s business will continue doing well in the coming few years. Its revenues for the third quarter are expected to rise by 43% to $460 million followed by $507 million in the next quarter. 

TPG’s annual revenue is expected to grow by 42% to $1.9 billion followed by $2.27 billion in the next financial year. TPG will likely beat these estimates as it has done as a publicly traded company.

Catalysts for the TPG stock

The company has several potential catalysts ahead. First, the recent interest rate cuts will likely lead to more corporate actions, including mergers and acquisitions (M&A) and initial public offerings (IPO), which will benefit PE firms. TPG, which has $14 billion in dry powder, will benefit when these deals rise.

Second, the company’s entry into the private credit industry is a positive thing as demand rises. Analysts believe that demand for privately-arranged debt will keep rising in the coming years. Just recently, Citigroup and Apollo Global teamed up to create a $25 billion private credit fund. 

Third, TPG stock will likely do well now that the American economy has avoided a hard landing that some analysts were expecting. TPG is also a good rewarder of shareholders with a forward yield of 2.90%. 

However, a key risk for investing in TPG is that it is a relatively overvalued company with a trailing P/E ratio of 28 and a forward multiple of 29. Also, the current stock price is higher than the average analyst estimates of $58.

TPG stock price analysis

Turning to the daily chart, we see that the TPG share price has been in a strong bull run since going public. It has remained above the 50-day Exponential Moving Average, meaning that bulls are in control.

TPG’s stock has formed a bullish flag pattern, which is characterised by a long flag pole and a rectangle pattern. In most periods, this is one of the most bullish signs in the market. Therefore, the stock will likely continue rising in the near term, with the next point to watch being at $70. This rebound will be confirmed when the stock rises above the year-to-date high of $60.35.

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Ferrari, the biggest merchant of super expensive super cars, has also become one of the most expensive companies in Wall Street. Its stock has jumped by 40% this year and by 736% since going public almost a decade ago. This surge has transformed it into the fourth-biggest automakers in the world after Tesla, Toyota, and BYD.

Ferrari’s surge has benefited all its shareholders, including Bailie Gifford, Bank of Italy, Norges Bank, and Blackrock. It has also benefited Exor, a large holding company that owns other firms like Stellantis, Philips. CNH, and Iveco.

Ferrari’s business is doing well

Ferrari has grown to become the biggest player in the luxury automobile industry, where it sells popular brands like SF90, Spider, 12cilindri, and Purosangue, its entry into the SUV industry.

Unlike other automobile industry, Ferrari vehicles are always in high-demand because it targets the wealthy. It also has long waiting list for most of its brands. Most importantly, Ferrari is always selective about who it sells its vehicles to. 

The company’s annual revenues have soared from over $4.2 billion in 2019 to over $6.8 billion in the last twelve months. Its annual profit has also jumped from $787 million in 2019 to over $1.49 billion in the TTM.

Most importantly, Ferrari, like Toyota, has been relatively reluctant to moving into the electric vehicle industry. Its first EV is expected to come online in 2025 with a hefty price of $500k, higher than some of its recent brands. Some analysts believe that most hardcore Ferrari lovers will not be interested in its EVs. 

These analysts cite the recent performance of Porsche, which unveiled the Taycan, a model that has become famous for depreciation. Other traditional automakers that have moved into the EV industry like Ford, General Motors, and Volkswagen have struggled to gain market share and lost billions of dollars. 

Read more: Ferrari stock receives a rare downgrade: find out more

Ferrari’s performance

The most recent financial results showed that Ferrari’s revenues rose to €1.7 billion in the second quarter, with its EBITDA margin coming in at 39.1%. Its net profit jumped to €413 million during the quarter. 

Its revenue rose after the company shipped 3,484 vehicles in Q2, a small increase from the 3,392 it shipped in the same period last year. On the other hand, its industrial free cash flow dropped by 11.1% to €121 million.

Ferrari believes that its business will continue doing well in the coming months. It expects that its annual revenue will be €6.55 billion this year, helped by its recent 12Cilindri order intake. Its industrial free cash flow is expected to come in at €0.95 billion. 

Valuation concerns remain

The biggest concern among Ferrari investors is its hefty valuation, which is one of the biggest in the auto industry.

Data compiled by SeekingAlpha shows that Ferrari has a non-GAAP P/E ratio of 57, higher than the sector median of 15. It also has a forward P/E ratio of 52, also higher than the industry median of 18.

These are big numbers for a company whose growth appears to be sluggish and one that could lose money in its EV business. Data shows that Ferrari’s revenue growth is about 1.37% while its forward figure is 12%. 

Ferrari’s valuation multiples are even higher than that of Nvidia, a company that has a P/E ratio of 54 and a forward multiple of 44. Nvidia, unlike Ferrari, is seeing triple-digit growth metrics because of artificial intelligence. 

The average estimate of Ferrari’s stock among analysts is $485, a few points above the current $471.

To be clear: Ferrari, as a highly premium brand, deserves a high valuation. Also, the fact that it is expensive does not mean that its stock will retreat. In fact, history shows that investing in highly expensive companies is often more rewarding than laggards.

Ferrari stock price analysis

RACE chart by TradingView

The weekly chart shows that the RACE share price has been in a strong bull run since going public. It has jumped from a record low of $30 in 2015 to almost $500 today. 

Most recently, the stock flipped the important resistance point at $441.37 into a support level. This was an important point since it was the previous all-time high.

Ferrari shares have remained above all moving averages and has remained above the 50-week moving average. Precisely, it is about 17% above this moving average.

Therefore, the stock will likely continue with the momentum ahead of its next results in November. It will benefit from the low interest rates that will lead to more spending among the wealthy.

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