Research Update: The Coca-Cola Co. Outlook Revised To Negative From Stable On Potential Coronavirus Fallout; Ratings Affirmed

The Coca-Cola Co.'s (Coke) profitability will likely decline in the first half of 2020 due to the negative economic impact of the global coronavirus outbreak. Our expected improvement in Coke's adjusted leverage--which was around 3x at year-end 2019--will likely be delayed, mainly because of materially lower on-premise demand for its products and potentially reduced operating efficiency to combat the spread of the virus among the Coke systems' workers. We are affirming our 'A+' long-term issuer credit rating on the Atlanta-based beverage company and revising our outlook to negative from stable. The negative outlook reflects the potential for a lower rating within the next 12 months if we forecast that the fallout from the coronavirus on the global economy and consumer

...- The Coca-Cola Co.'s (Coke) profitability will likely decline in the first half of 2020 due to the negative economic impact of the global coronavirus outbreak. - Our expected improvement in Coke's adjusted leverage--which was around 3x at year-end 2019--will likely be delayed, mainly because of materially lower on-premise demand for its products and potentially reduced operating efficiency to combat the spread of the virus among the Coke systems' workers. - We are affirming our 'A+' long-term issuer credit rating on the Atlanta-based beverage company and revising our outlook to negative from stable. - The negative outlook reflects the potential for a lower rating within the next 12 months if we forecast that the fallout from the coronavirus on the global economy and consumer behavior will prevent Coke from improving credit ratios by the end of 2021, including sustaining adjusted leverage below 3x....

Research Update