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KO · Forward model · Latin America · Bull case

What has to happen in Latin America

Model as of

This page changes Latin America inside the complete KO model. Every other vertical, corporate programme and valuation assumption stays in the selected portfolio case.

KO forward model
Horizon
Consolidated fair value $98.53 all other verticals held in this portfolio case
Final-quarter revenue $2.40B 15% of company revenue
Explicit segment contribution $22.54B EBITDA less segment capex, before corporate items

Guidance has been raised twice in 2026 and the raises landed on the earnings line rather than on volume. Comparable EPS growth went from 7% to 8% on 10 February, to 8% to 9% on 28 April, to 9% to 10% on 28 July, while organic revenue only moved to the top of an unchanged 4% to 5% range. That is margin and mix. Comparable operating margin reached 35.6% against 34.7%, free cash flow guidance rose to approximately $12.4bn, and the underlying tax rate improved from 20.9% at the February guide to 19.9%. This case takes the bottom of the derived African bottling range and holds the exit multiple at roughly where the shares trade today.

Latin America

Basis quarter$1.84B
Final quarter$2.40B
Implied CAGR+5%
Final revenue mix15%

Mexico, Brazil and the rest of Latin America, almost entirely concentrate: $1,839M of third-party revenue with no intersegment revenue and no segment capital expenditure at all in the basis quarter. The highest-margin vertical in the company at a 64.5% EBITDA margin. Reported revenue grew 16% in 2026 Q2 on concentrate sales +1 and price/mix +3, with an 11-point currency tailwind doing the rest.

Last four quarters
2025 Q3 $1.57B Reported
2025 Q4 $1.70B Estimated
2026 Q1 $1.68B Reported
2026 Q2 $1.84B Reported
Concentrate sales to bottling partners in Mexico, Brazil and the rest of Latin America
Sequential growth +1.3%/qtr decaying toward +0.9% 1.35% is the 2024 Q2 to 2026 Q2 compound quarterly rate; the trailing four-quarter rate of 3.75% is currency, not trend.
Latin America

Latest: $2.40B (2031Q2E)

Period Value
2024Q1 $1.53B
2024Q2 $1.65B
2024Q3 $1.64B
2024Q4 $1.65B
2025Q1 $1.48B
2025Q2 $1.59B
2025Q3 $1.57B
2025Q4 $1.70B
2026Q1 $1.68B
2026Q2 $1.84B
2026Q3E $1.87B
2026Q4E $1.90B
2027Q1E $1.93B
2027Q2E $1.96B
2027Q3E $1.98B
2027Q4E $2.01B
2028Q1E $2.04B
2028Q2E $2.07B
2028Q3E $2.10B
2028Q4E $2.12B
2029Q1E $2.15B
2029Q2E $2.18B
2029Q3E $2.20B
2029Q4E $2.23B
2030Q1E $2.26B
2030Q2E $2.29B
2030Q3E $2.32B
2030Q4E $2.35B
2031Q1E $2.37B
2031Q2E $2.40B

Assumptions & reasoning

  • Left aseasonal on the evidence, not for want of trying: the fitted amplitude is 0.041 against a worst-case window-to-window spread of 0.038, so the spread is the signal. A four-factor vector here would encode noise.
  • This is the most currency-exposed line in the model. Of the 16% reported growth in the basis quarter, 11 points were currency and 5 were organic, which is why the terminal rate is set at 0.9% a quarter rather than anywhere near the trailing reported pace.
  • The terminal EBITDA margin is trimmed 1.5 points below the 64.5% basis quarter for the same reason: that margin was struck on revenue an 11-point currency tailwind had already inflated.
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