What to Expect When Pepsi Reports

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PepsiCo Inc. (NASDAQ: PEP) is one of the first major companies to report earnings this week, with results expected Tuesday morning before the markets open. For the second quarter, the consensus estimates from Thomson Reuters are calling for $1.52 in earnings per share (EPS) and $16.05 billion in revenue. The same period from last year reportedly had EPS of $1.50 and $15.71 billion in revenue.

This company has taken an aggressive approach to 2018 through its product launches and marketing schemes. These ultimately reflected well in the first quarter, driven by strong international sales, especially in emerging markets.

Pepsi is known as a defensive stock with a brand portfolio that can withstand a lot of punishment. Despite this strength, Pepsi shares are still lower this year, but not for lack of trying.

Management recognizes that it needs to step up investments in core carbonated soft drinks, which it intends to do. Also in the last report, Chair and CEO Indra Nooyi was fairly optimistic and believes Pepsi’s plans “will drive further improvement as the year progresses.”

Excluding Monday’s move, Pepsi has underperformed the broad markets, with the stock down over 8% year to date. Over the past 52 weeks, the stock was down 5%.

A few analysts weighed in on PepsiCo ahead of the report:

  • Deutsche Bank has a Hold rating with a $116 price target.
  • Susquehanna Bancshares has a Buy rating with a $130 target.
  • Barclays has a Hold rating with a $108 price target.
  • SunTrust Banks has a Hold rating and a $105 price target.
  • Stifel has a Hold rating with a $110 price target.
  • Goldman Sachs has a Sell rating.

Shares of PepsiCo were last seen down about 1% at $108.55, with a consensus analyst price target of $114.43 and a 52-week range of $95.94 to $122.51.