What happened

Shares of Coca-Cola Company (KO -0.45%) stock closed trading Wednesday down a bit more than 4.9%.

That's not too surprising; it's actually a bit less than the loss most stocks suffered. When the closing bell rang, after all, the Dow Jones Industrial Average was down 6.3%, and the S&P 500 had dropped an only slightly less extreme 5.2%.

What is surprising is that, in contrast to most stocks today -- which fell on no obvious news, and simply "because everything is going down" -- there was actually an identifiable reason behind Coca-Cola's decline: an analyst downgrade from investment bank Morgan Stanley.

Slightly crumpled Coke can

Image source: Getty Images.

So what

So what did Morgan Stanley have to say? As related by TheFly.com, which covered the downgrade, it wasn't anything earth shattering. All Morgan Stanley did was cut its rating on Coca-Cola stock from "overweight" to "equal weight" (i.e. from buy to hold).

The reason: n the analyst's view, the nationwide movement to close restaurants to slow the roll of coronavirus, combined with related moves to limit the size of public gatherings, will result in "weaker demand" for soft drinks outside the home.

Logical, right?

Now what

And yet, here's what I don't get: According to Morgan Stanley, Coke stock is still worth $52 a share. That's a bit less than the $65 the analyst previously estimated, but it still values this stock at 16% more than what it costs today.

However, even at its current price of less than $45 a share, Coke shares cost more than 21.6 times trailing earnings. That may be less than what the stock fetched a few weeks ago, but it still doesn't seem particularly cheap to me -- not for a stock growing earnings at the 8% annualized rate analysts forecast before this crisis, and certainly not for the probably slower-than-8% growth rate that we'll see if the COVID-19 coronavirus outbreak pushes us into an out-and-out recession.

Morgan Stanley's downgrade may have driven Coke shares down today, but given the valuation, I suspect they still have further to fall.