Pepsico

The key debate around PepsiCo remains on 2025 and whether its investments on value and promotions can lead to an acceleration in organic sales growth, particularly at Frito, while still driving earnings per share growth on algorithm, Citi analyst Filippo Falorni says in a research note. The beverage giant should see a gradual improvement in organic sales growth to 2.7% in 2025 from 2% in 2024, with slightly below-algo 2025 earnings per share growth on reinvestment, Falorni says. Citi raises its 2024 EPS estimates to $8.14 from $8.10 previously, and its 2025 EPS views to $8.55 from $8.50.

PepsiCo’s (PEP) third-quarter financial results are not expected to see a “material” upside to projections, while its full-year organic sales outlook could face some pressure amid continued sluggish domestic trends, RBC Capital Markets said Friday. The beverage and snacks company is scheduled to report third-quarter results Tuesday. RBC lowered its adjusted earnings expectations to $2.28 a share from $2.31 and its revenue outlook to $24.02 billion from $24.34 billion. Wall Street is looking for $2.30 and $24 billion, respectively. “We are expecting (PepsiCo’s) quarter to look like recent prints, with modest topline results and in-line to slightly better EPS, and don’t see material upside overall,” RBC co-Head of Global Consumer and Retail Research Nik Modi said in a note to clients. The company’s international business is once again expected to lead the growth amid “muted” domestic trends,” Modi wrote. Although Frito volumes have improved sequentially, they’re still not “overly robust”

Pepsi seems to be facing growing investor pressure, with its 2024 organic revenue guidance close to potentially proving to be aspirational, UBS analysts say in a research note. The embedded improvement in trends isn’t playing out as many would have anticipated, the analysts say. There are also questions as to whether the maker of soft drinks and owner of snack brands such as Lay’s and Doritos will need to pull additional levers to drive an improvement in volume consumption, which may result in greater investment/lower bottom line growth looking ahead, the analysts add. Shares fall 0.6% to $167.45.

The following is a summary of the PepsiCo, Inc. (PEP) Q2 2024 Earnings Call Transcript: Financial Performance: PepsiCo’s overall productivity and cost reduction efforts have enabled them to reinvest in growth strategies, particularly in the second half of 2024. International markets reported 7% growth in the first half of the year, and this growth rate is expected to continue. The U.S. market encountered slight growth challenges, particularly in Frito-Lay North America due to softer volume results. Business Progress: Quaker is expected to recover its supply chain by Q4 2024, which will significantly boost its operations and sales. Investments in international markets continue to yield positive results, expected to maintain growth momentum. Strategic marketing and localized product innovations, particularly in China, are enhancing PepsiCo’s competitive edge. Opportunities: Continued expansion and investments in international markets are projected to sustain growth. Increased marketing, particularly in the North American beverage segment, aims to bolster

PepsiCo’s 2Q results were soft as expected with weak volume trends in North America, leading to a lowered organic revenue growth outlook. Despite the cut not being major, it’s not de-risked, as it still implies a strong acceleration in the second half of the year that will be largely dependent on an improvement in the North America business, Citi analyst Filippo Falorni says in a research note. “Given U.S. scanner data trends remain soft, we expect investors will continue to question the implied second-half topline guidance and maintain a negative short-term view,” Falorni says.

Pepsico Guidance and Outlook The Company provides guidance on a non-GAAP basis as we cannot predict certain elements which are included in reported GAAP results, including the impact of foreign exchange translation and commodity mark-to-market net impacts. Consistent with its previous guidance for 2024, the Company continues to expect: • At least 4 percent increase in organic revenue; • At least 8 percent increase in core constant currency EPS; • A core annual effective tax rate of 20 percent; and • Total cash returns to shareholders of approximately $8.2 billion, comprised of dividends of $7.2 billion and share repurchases of $1.0 billion. In addition, the Company continues to expect an approximate 1-percentage-point foreign exchange translation headwind to impact reported net revenue and core EPS growth based on current market consensus rates. This assumption and the guidance above imply 2024 core EPS of at least $8.15, a 7 percent increase compared

CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows: We maintain a 12-month target of $200, based on a 2025 P/E of 22.2x, a discount to its 5-year mean forward P/E of 24.5x. We raise our adjusted EPS estimates by $0.10 to $8.25 for 2024 and by $0.10 to $9.00 for 2025. PEP posts Q1 adjusted EPS of $1.61 vs. $1.50 (+7%), nine cents ahead of consensus. The beat was driven by a stronger-than-expected top line, as net revenue rose 2.2% to $18.25B ($150M above consensus) driven by higher prices, as volume fell 0.5% for Convenient Foods and was flat for Beverages. Notably, volumes were higher across both product types across the Europe, Asia, and Africa markets, helping offset weakness in North America. Gross margin contracted 40 bps to 54.8% (60 bps below consensus). PEP maintained

The following is a summary of the PepsiCo, Inc. (PEP) Q1 2024 Earnings Call Transcript: Financial Performance: PepsiCo’s international business is currently valued at $36 billion, increasing at a high single-digit level, resulting in strong international profit results for the third consecutive quarter. Frito-Lay’s operating margins were slightly weak in Q1 due to growth investments, but are expected to improve over time as the company continues to invest in the business. Business Progress: PepsiCo continues to build scaled operations in Vietnam, China, India, Mexico, and Poland, signaling a substantial investment in international markets. The strategic decision to de-emphasize certain products in North America shows the company’s focus on increasing profitability. Partnership with CELSIUS shows PepsiCo’s diversification into the energy drink sector, reflecting an innovative approach to market expansion. PepsiCo remains committed to maintaining market positions across various global regions through local food understanding, value-driven strategy, and innovative commercial propositions. PepsiCo

PepsiCo is one of the most mentioned companies in the U.S. across all news items in the past 12 hours, according to Factiva data. PepsiCo earnings and sales jumped last quarter, as higher prices offset a drop in volumes. Sales were up 2.3% at $18.25 billion, clearing analysts’ projections. Volumes dropped 2% on an organic basis, largely driven by a slowdown in beverages, plus a subsidiary’s voluntary recall of certain granola bars and cereals. Revenue rose to $18.25 billion from $17.85 billion a year earlier, topping analysts’ forecasts for $18.08 billion, according to FactSet. Dow Jones & Co. owns Factiva.

Barclays analyst Lauren Lieberman maintains PepsiCo (NASDAQ:PEP) with a Overweight and raises the price target from $183 to $184.

PepsiCo (PEP) is likely to report relatively in-line fiscal Q1 results and reiterate its fiscal 2024 guidance, but a “fundamental inflection” is expected in the rest of the year that could drive the stock to outperform, Morgan Stanley said Monday in a report. “We see Q1 [earnings per share] as the bottom fundamentally for the stock in our minds, and we are looking ahead to improving results in the balance of the year, as comparisons move from difficult to more benign, [short-term] pressure points dissipate, and sequential pricing deceleration dissipates,” the firm said. Morgan Stanley, which recently upgraded PepsiCo to overweight from equal-weight, also said the market has priced in too much risk following what looked like poor results particularly in Q4 of the previous fiscal year. Thus, valuation now looks “too low.” The firm said it expects the company’s organic sales growth bottoming at 2.3% in Q1 of the

PepsiCo (PEP) is likely to post “depressed” first-quarter results and reiterate its full-year outlook amid subdued expectations, though organic sales growth is projected to accelerate for the rest of the year, Morgan Stanley said in a note e-mailed Monday. The beverage and snacks company is scheduled to report March-quarter results on April 23. Morgan Stanley projects earnings at $1.51 per share and organic sales growth at 2.3%. Wall Street is looking for $1.52 and 2.5%, respectively, the brokerage said in a note. Morgan Stanley said the company could see “modest” upside to the firm’s and the Street’s organic sales outlooks, with the metric likely to see acceleration for the rest of the year as annual headwinds dissipate and comparisons ease. The brokerage expects the sequential pricing drop-off to ease in the second half of the year, while Quaker volumes are seen improving somewhat sequentially in the second quarter. “We think