Coca-Cola Co (NYSE:KO) has both attractive and sustainable growth drivers, with the North and Latin American regions driving attractive growth and exposure to emerging markets being a driver of sustainable long-term growth, according to Piper Sandler.

The Coca-Cola Analyst: Analyst Michael Lavery initiated coverage of Coca-Cola with an Overweight rating and a price target of $74.

The Coca-Cola Thesis: North America and LatAm contribute around 70% of the company's EBIT and have been the key drivers of growth over the last few years, Lavery said in the initiation note.

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Coca-Cola has significant exposure to emerging markets, which represent "a large, sustainable long-term growth driver," the analyst wrote. In these markets, around 68% of the population do not drink any commercial beverage and this opportunity represents around 4.5 times Coca-Cola's current consumer base, he added.

"Population growth and rising EM incomes help drive sustainable volume and pricing gains," Lavery further wrote.

The franchised bottling system that allows Coca-Cola to focus on brand building and strong marketing "is the key driver of KO's long-term growth algorithm and its best-in-class global brands," the analyst said.

KO Price Action: Shares of Coca-Cola had risen by 0.61% to $61.18 at the time of publication on Tuesday.

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