What to Expect From Pepsi Earnings

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Pepsico, Inc. (NYSE: PEP) is scheduled to release its third-quarter earnings report before the markets open on Thursday. The consensus estimates are calling for $1.32 in earnings per share (EPS) on $15.83 billion in revenue. The same period from last year had $1.35 in EPS on $16.33 billion in revenue.

The company has so far this year been successfully balancing the need to reduce costs via productivity programs and reinvesting a portion of the savings to sustain solid sales growth. Many analysts are also seeing the company as having a reasonable valuation with room to run given its exposure to high-value categories (soft drinks/snacks) and attractive growth opportunities outside of the US.

In what continues to be an incredibly volatile global macro environment, Pepsi has been pleased with its results in 2016. While second quarter reported net revenue performance was negatively impacted by foreign exchange translation and the deconsolidation of Venezuelan operations, Pepsi delivered balanced volume growth and positive price/mix which led to solid organic revenue growth.

The company actually hit a new all-time high this past quarter as well.

A few analysts weighed in on Pepsi ahead of the earnings report:

  • Merrill Lynch reiterated a Buy rating with a $120 price target.
  • Credit Suisse has an Outperform rating with a $121 price target.
  • Credit Agricole reiterated an Outperform rating.
  • Sanford Bernstein reiterated an Outperform rating with a $118 price target.
  • BMO Capital Markets reiterated an Outperform rating.
  • Argus has a Buy rating and a $124 price target.

So far in 2016, Pepsi has outperformed the broad markets with the stock up about 10% in this time. Over the past 52-weeks the stock is actually up about 20%.

Shares of Pepsi were last trading at $107.16, with a consensus analyst price target of $117.60 and a 52-week trading range of $92.53 to $110.94.