Earnings Previews: Delta Air Lines, PepsiCo, Rite Aid and More


Despite an up and down year in 2020, PepsiCo Inc. (NYSE: PEP) but managed to post a share price gain of nearly 12% for the whole year, including a 23% price drop in late March. For the past 12 months, shares are up about 10.4%, and since January the stock has dipped by about 2.7%. Pepsi fared better than archrival Coca-Cola in 2020 because Pepsi relies less on restaurant and out-of-home sales. Yet, rising commodity and transportation costs may continue to weigh on profits.

Of 22 analysts’ ratings on the shares, 12 are Buy or Strong Buy and the rest are Hold. At a current price of around $143.30, the potential upside to the consensus price target of $152.04 is about 6%. At the high target of $162, the potential upside is about 12.4%.

Analysts expect Pepsi to post EPS of $1.12 on sales of $14.55 billion for the first quarter. Last year, first-quarter EPS were $1.07, on sales of $13.88 billion.

PepsiCo stock trades at a multiple of 23.7 times expected 2021 EPS, 21.9 times estimated 2022 EPS and 20.3 times estimated 2023 earnings. The stock’s 52-week range is $126.53 to $148.77, and the company pays an annual dividend of $4.09 (yield of 2.86%).

Rite Aid

Drugstore giant Rite Aid Corp. (NYSE: RAD) posted a gain of just 2.3% in 2020, but looking back at the previous 12 months, the stock has done much better, rising about 46%. The stock had added about 77% in the first three weeks of the year, but that meteoric rise has settled into a gain for the year to date of just over 20%. The latest whack to the share price came late last month when Rite Aid lowered its sales guidance for its fourth fiscal quarter and said it expects a net loss of $100 million for the 2021 fiscal year.

The company doesn’t get a lot of love from analysts, with just one of eight ratings on the stock a Buy and the rest rating it a Hold. Shares currently trade near the consensus price target of $19.13. At the high target of $27, the potential upside on the stock is 42%.

Analysts expect Rite Aid to post a fourth-quarter loss per share of $0.55 on sales of $5.8 billion. For the 2021 fiscal year, Rite Aid is expected to report EPS of $0.09 and sales of $23.98 billion.

Rite Aid stock trades at a multiple of around 210 times expected 2021 EPS, 18.5 times estimated 2022 EPS and 62.7 times estimated 2023 earnings. The stock’s 52-week range is $8.86 to $32.487, and the company does not pay a dividend.

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