PepsiCo Earnings Preview: Analysts Anticipate Growth Amidst Market Challenges
PepsiCo, Inc. (PEP), a major player in the global snack and beverage market, has its headquarters in New York. With a robust market capitalization of $199.5 billion, the company is gearing up to announce its fiscal Q4 earnings on Tuesday, Feb. 4, before the market opens.
Forecasts and Recent Performance
Analysts predict PepsiCo will report earnings of $1.95 per share for Q4, marking a 9.6% increase from $1.78 per share in the same quarter last year. The company has maintained a strong track record by exceeding Wall Street’s earnings expectations for the past four quarters.
Long-Term Outlook
For fiscal 2024, the outlook remains positive, as analysts anticipate an earnings per share (EPS) of $8.15, which represents a 7% rise from $7.62 in fiscal 2023. Looking ahead to fiscal 2025, EPS is expected to grow by 5.4% to reach $8.59.
Stock Movement and Market Challenges
However, PEP’s stock has decreased by 13.4% over the past year, underperforming compared to the broader S&P 500 Index, which saw a 24.2% gain. In contrast, PepsiCo’s stock outperformed the S&P 500 Consumer Staples Sector SPDR (XLP), which had a return of only 6.7% in the same period.
This dip in share price can be linked to several factors: intense competition, a shift in consumer preferences towards healthier products, rising costs, and decreased spending in key markets. These issues have challenged PepsiCo’s core snack and beverage divisions, even as the company adapts to the growing demand for healthier options.
Recent Earnings Surprise
Despite the hurdles, PepsiCo experienced a 1.9% share price increase on Oct. 8, following a strong Q3 performance. The company reported core EPS of $2.31, beating analyst expectations with a year-over-year increase of 2.7%. While revenue of $23.3 billion fell short of expectations, PepsiCo posted encouraging international results, showing 4% organic revenue growth and significant volume gains.
Analyst Sentiment
Current analyst sentiment reflects cautious optimism for PepsiCo’s stock. Among 20 analysts, there is a “Moderate Buy” rating consensus. Specifically, 10 analysts recommend a “Strong Buy,” nine suggest holding, and one analyst rates it as a “Strong Sell.”
Price Target and Conclusion
The average price target for PepsiCo is projected at $181.78, indicating a potential upside of 24% from its current trading levels.
On the date of publication, Kritika Sarmah did not hold any positions in the securities mentioned in this article. All information and data in this article are for informational purposes only. For more details, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
