Coca-Cola (KO) shares hit record highs after a 35% rally this year that has far outpaced the S&P 500. The author argues valuation is stretched, with a trailing P/E around 28, matching levels last seen in late 2024 and early 2025, a trailing price-to-sales ratio just above 8 at a multi-decade high, and a trailing dividend yield of 2.2%, a multi-year low. The rally may reflect a flight to safety into consumer staples amid worries about the AI industry, even though Coke has raised its dividend for 64 consecutive years. The analyst consensus target price of $96.29 is only about 2% above the current price, so the author suggests investors may consider waiting for a pullback and that other dividend payers offer bigger upside.
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