Always The Real Thing: J.P. Morgan Upgrades Coke To Overweight (KO)

J.P.Morgan Chase & Co is upgrading shares of Coca-Cola (NYSE: KO) after the soft-drink maker reported strong quarterly earnings this morning. It raised shares to Overweight and lifted the price target to $66 from $62.

In the report J.P. Morgan writes, "We are upgrading the Coca-Cola Company from Neutral to Overweight. Coke has been the worst performing name in our US beverage universe, and the stock is no longer priced for near perfection, as it was in January. The stock has underperformed the group by 13% YTD and PEP by 10% YTD. As the CCE deal closes and developed markets improve, we would expect valuation to normalize." "We upgrade KO to Overweight. Coke has lost its premium to the group this year given the surprise announcement to buy CCE’s NA business, challenges in developed markets and increased risk from foreign exchange. We are introducing our year end 2011 price target of $66 which offers 20% upside from here. We also believe that Coke’s resumption of share repurchase in Q4 will help support the stock."

Shares of Coca-Cola are up 89 cents to $56 this morning.