What happened
Stock markets are on fire today, with hopes for a financial relief package out of Washington helping to lift the S&P 500 more than 7% as of 2:55 p.m. EDT. Curiously, though, Coca-Cola (KO 0.98%) stock is not one of the bigger winners, up only 4.7%.
So what
The situation with Coca-Cola only becomes more curious when you learn that this morning, the stock won an upgrade to buy from investment banker HSBC, which assigned the shares a $45 price target promising more than 14% upside from present prices.
Stocks are running higher. But why isn't Coke stock running faster? Image source: Getty Images.
Why isn't Coke stock up more than the average today? Ask the CEO.
Speaking to CNBC today, Coca-Cola CEO James Quincey warned investors that although his company has seen "explosive growth" in grocery sales of its products, especially bottled water, reports TheFly.com, the growth in "at home" sales won't be enough to completely offset sales of "away from home" drinks (e.g. sales at restaurants). As a result, Coke expects to see at least some "financial impact" when it reports second-quarter 2020 earnings.
Now what
In related news, Quincey told CNBC that in order to avoid losing skilled employees, Coke will not be restructuring to lay off employees in the midst of this crisis. That could mean more short-term financial pain for the company, if it continues paying workers who may be confined to their homes by government decree and cannot actually work.
In the long term, however, demonstrating loyalty to employees could pay off for Coca-Cola, and ensure that once this crisis passes, the company has the employees -- and the loyalty of those employees -- needed to take full advantage of the rebound from recession.
