The Coca-Cola Company (KO) yesterday, on April 24, released its Q1 results and they appeared quite spectacular. While the last quarter (Q4FY22) was a mixed bag, Q1FY23 looked more akin to the company's amazing Q3FY22, with almost all directions advancing.

In numbers, earnings per share were 68 cents, beating expectations by 3 cents. More importantly, EPS rose 4 cents YoY posting a 6.25% growth for a company that was constantly downgraded by analysts on its growth prospects.

Revenue of $11 Billion beat estimates by a healthy $220 Million as average selling prices during the three months to March 31 grew by 11%, the company noted. Unit case volumes still rose by 3%, aided in particular by strong performance of its sparkling soft drinks in Asia Pacific and Latin America. The revenue number came in higher than the same period last year and up 5% from the $10.5 billion reported in the same period last year. Organic sales posted growth at 12%, well above the consensus estimate of 9.6%.

Global general cargo volumes rose 3% in Q1, after falling 1% in Q4FY22. For Coca-Cola, this is an often overlooked but important metric. It includes beverages sold directly and indirectly by Coca-Cola and its affiliates.

However, despite the pricing power, KO’s operating margin declined from 32.5% to 30.7% on an annual basis, partially due to USD strength headwinds. Also, Free Cash Flow, FCF, for the quarter was negative at -$120 Million as Q1 has been Coca-Cola's weakest quarter for many years.

So, the earnings were moderately positive with certain detriments spoiling the integrity of the whole picture. As a result, shares of The Coca-Cola Company demonstrated muted growth, to the tune of just 0.03% after the main session close, because given the above data, The Coca-Cola Company’s stock is at least fully valued, if not overvalued here.