Valuation of Coca-Cola's share price at the end of 2021 based on the SWOT analysis method of analyzing multiples valuation model

Abstract

Appraising the enterprise value of a company in the soft drinks industry in terms of its earnings, fixed assets, intangible assets, goodwill, human resources, etc. has always been a complex issue. Given the convenience of the valuation method, analysts often choose to avoid complex valuation models by opting for multiple valuation models. When using the multiple valuation method, it becomes a question of how to use the correct multipliers and how to target the analysis to the soft drinks industry. In this article, PepsiCo, Monster Beverage Corp, and Nestlé SA were chosen as comparable companies and a multiple valuation model was used to derive three different Coca-Cola share prices at that time based on financial data at the end of 2021 using P/E, EV/EBITDA, and EV/Sales as multipliers respectively. It was found that the median could not be used as a multiplier for calculation purposes and that EV/Sales performed much worse than the other two multiples. In response to these two findings, the article makes several recommendations for valuation practices in the soft drinks industry and for the operations of soft drinks companies.