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Pro Analysis

Wells Fargo downgrades Coca-Cola, says stock overvalued given earnings going nowhere

Chris Ratcliffe | Bloomberg | Getty Images

Wells Fargo Securities lowered its rating on Coca-Cola to market perform from outperform, saying the company doesn't deserve a valuation premium given the prospect of weak earnings this year.

"We don't believe KO will be immune from the staples rotation underway," analyst Bonnie Herzog wrote in a note to clients Wednesday. "We see limited upside potential to KO stock in 2017 given increased earnings pressure due to significant macro/structural headwinds ... and we see little reason for investors to continue to reward KO with multiple expansion."