Fitch Ratings downgraded the long-term issuer default rating of Coca-Cola Co. to A from A+ while keeping the ratings outlook stable.

The ratings downgrade reflected Coca-Cola's higher net leverage compared to Fitch's previous expectations. The company recently announced its long-term financial targets, which included a net debt leverage ratio of 2.0x to 2.5x.

Fitch said Coca-Cola's net leverage target would provide greater certainty around the company's long-term capital structure since the U.S. tax reform would give Coca-Cola greater access to its off-shore cash stockpiles.

Fitch also said the new targets would provide Coca-Cola with additional flexibility to pursue strategic M&A to broaden the beverage portfolio.

Coca-Cola's long-term business model will improve from the refranchising plans, completed in late 2017, said the report. Fitch added that Coca-Cola will see significantly improved results in 2018 on the back of cost reduction initiatives, buoyed by refranchising and productivity initiatives.

The rating agency said Coca-Cola's gross margin would improve by almost 66% and operating margins by nearly 34% at the end of 2019.