PepsiCo Prepares to Release Q1 Earnings Amid Market Challenges

PepsiCo, Inc. (PEP), based in Purchase, New York, manufactures, markets, distributes, and sells a wide range of beverages and convenient foods worldwide. With a market capitalization of $192.4 billion, the company boasts a portfolio of well-known brands, including Lay’s, Doritos, Pepsi, Kurkure, Lipton, Quaker, and 7UP, among others.

First-Quarter Earnings Preview

On Thursday, April 24, PepsiCo is expected to announce its first-quarter results before the market opens. Analysts project that PEP will report a non-GAAP earnings per share (EPS) of $1.51, reflecting a decrease of 6.2% compared to the $1.61 reported in the same quarter last year. However, it is worth noting that PepsiCo has consistently exceeded the Street’s bottom-line expectations in the last four quarters.

Fiscal 2025 and 2026 Outlook

For the full fiscal year 2025, PepsiCo is anticipated to achieve a non-GAAP EPS of $8.27, which represents a slight increase of 1.4% from the $8.16 EPS in fiscal 2024. Projections for fiscal 2026 show a more significant growth, with expected earnings rising 6.4% year-over-year to $8.80 per share.

Stock Performance Analysis

Over the past year, PepsiCo’s stock prices have decreased by 14.7%, lagging behind the Consumer Staples Select Sector SPDR Fund (XLP), which gained 6.3%, and the S&P 500 Index ($SPX), which returned 4.7% during the same period.

Q4 Results Impact

Following the release of its fourth-quarter results on February 4, PepsiCo’s stock dropped by 4.5%. Ongoing softness in demand has impacted both beverage and food volumes, leading to an overall revenue decline of 24 basis points year-over-year to $27.8 billion, which fell slightly short of analysts’ expectations. Despite this, PepsiCo’s non-GAAP EPS saw a 10.1% increase year-over-year, reaching $1.96, exceeding consensus estimates by 51 basis points. However, the company’s operating cash flows dipped nearly 7% year-over-year to $12.5 billion, causing concerns among investors.

Analyst Sentiment

Despite recent challenges, analysts maintain a cautiously optimistic outlook on PepsiCo’s stock. The consensus rating is a “Moderate Buy,” with 20 analysts providing their insights. This includes eight “Strong Buys,” 11 “Holds,” and one “Strong Sell.” The average price target is set at $162.10, indicating an upside potential of 11.3% from current levels.

On the date of publication, Aditya Sarawgi did not hold positions in any of the securities mentioned in this article. All information and data are intended solely for informational purposes. For more details, please view the Barchart Disclosure Policy here.

More news from Barchart

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.