PepsiCo Earnings Announcement Set for April 2025
PepsiCo (NASDAQ:PEP) is set to announce its earnings on Thursday, April 24, 2025. Historically, the company’s stock (PEP) has often seen positive price movements following earnings releases. Over the last five years, PEP stock has recorded a positive one-day return in 84% of instances, with a median gain of 1.3% and a maximum increase of 3.6%.
Investment Strategies for Earnings Season
For traders focused on these events, understanding historical patterns may provide an advantage. Two common strategies include:
- Pre-earnings Positioning: Analyze the historical likelihood of a positive reaction and establish a position prior to the earnings announcement.
- Post-earnings Correlation Analysis: Investigate the relationship between immediate stock reactions and medium-term outcomes after earnings are disclosed.
Financial Expectations and Performance Metrics
Current consensus estimates predict earnings per share (EPS) of $1.50 on sales of $17.74 billion. Comparatively, last year’s figures were $1.61 per share on $18.25 billion in sales. This anticipated decline is primarily attributed to a projected decrease in North American volumes as consumers exercise caution in their spending.
From a fundamental viewpoint, PepsiCo has a market capitalization of $194 billion, with revenue over the last twelve months totaling $92 billion. The company’s operational profitability is evident, reporting $13 billion in operating profits and a net income of $9.6 billion.
Historical Performance of Post-Earnings Returns
In examining the trends of one-day (1D) post-earnings returns:
- There are 19 earnings data points recorded over the last five years, with 16 positive and 3 negative one-day (1D) returns. Positive 1D returns occurred approximately 84% of the time.
- This percentage rises to 92% when considering data from the last three years.
- The median for the 16 positive returns is 1.3%, while negative returns averaged -0.8%.
Understanding Correlations in Returns
Identifying the correlation between short-term and medium-term returns can yield a less risky strategy. For instance, if the correlation between 1D and 5D returns is strong, a trader might consider going long for the next five days following a positive 1D return. Check the correlation data based on both 5-year and more recent 3-year history.
Peer Earnings Impact
Influences from peer performance may affect post-earnings stock reactions. Market sentiments might begin adjusting prior to the earnings announcement. A comparative analysis of past post-earnings performance offers insights into how PepsiCo stock fared against peers announcing earnings beforehand.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
