The KFC deal shows that Coca-Cola is winning in North America - TD Cowen

Coca-Cola (KO) will supply beverages for the first time at KFC locations in the U.S. in a new partnership that will cover all locations by the spring.

TD Cowen views the news of Coca-Cola (KO) picking up Yum! Brands' (YUM) KFC business at PepsiCo's (PEP) expense as a positive for the Atlanta-based beverage giant, although more symbolic than quantitative. Analyst Robert Moskow and his team estimate a 10 to 20 basis point benefit to Coca-Cola's (KO) total revenue in 2027 when the contract begins.

Moskow continues to view PepsiCo's North America Beverages as a market share donor to Coca-Cola (KO) and Keurig Dr Pepper (KDP) in the U.S. market. "Our retail tracking data indicates that Coca-Cola has gained 70 bps of market share in carbonated soft drinks over the past two years while PepsiCo has lost 130 bps," highlighted Moskow. "KDP has gained share if we include energy drinks. We perceive these two as investing more heavily and consistently in the U.S. beverage market to drive revenue growth, while PepsiCo often describes cost-cutting and margin expansion as significant priorities," he added.

Shares of Coca-Cola (KO) edged 0.8% higher in premarket trading, while PepsiCo (PEP) was up 0.7%.

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