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In the last five years, Pepsi has never failed quarterly earnings projections.
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PepsiCo
Bull is getting a jump on the beverage and food behemoth’s second-quarter report, which is due out on Tuesday: She’s now recommending a purchase. PepsiCo was given an Outperform rating and a $165 price target by Cowen & Co. analyst Vivien Azer on Friday (ticker: PEP). She expects the company to earn $1.51 per share, 2 cents less than the average analyst estimate—though she cautions that this figure may be conservative—and organic revenue growth of 8.6%.
Frito Lay North America’s organic revenue growth is expected to be 4%, according to Azer, who also notes that the division is holding up well despite adverse year-over-year comparisons when more consumers snacked at home during the Covid-19 limitations. Pepsi’s North American beverage business, on the other hand, is expected to have the easiest comparison of the year in the second quarter, according to the analyst, who also points out that recent data suggests it may be pushing ahead of Coca-Cola (KO) in terms of sales growth. Additionally, because of a successful vaccine launch in the United States, which accounts for almost two-thirds of Pepsi’s profits, overall Covid-related expenditures should be lower. Nonetheless, the persisting pandemic threat in Latin America, according to Azer, could be a hindrance in the region. Pepsi’s profits have also piqued the interest of other analysts. A little more than half of FactSet’s 23 analysts rate it as a Buy or equivalent, with 43 percent on the fence and one negative prediction. The median analyst price target for the stock is $156.02. PepsiCo is expected to earn $1.53 per share on $17.97 billion in revenue, according to consensus. This is up from $1.21 per share and $14.82 billion in the prior quarter, which was announced in April. In the last five years, Pepsi has never failed quarterly earnings projections. At 8:15 a.m. Eastern time on Tuesday, Pepsi will hold a conference call./n
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