We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why PepsiCo (PEP) Looks Poised for Earnings Beat in Q2
Read MoreHide Full Article
PepsiCo, Inc. (PEP - Free Report) is expected to register top and bottom-line growth when it reports second-quarter 2021 numbers on Jul 13, before the opening bell. The Zacks Consensus Estimate for second-quarter revenues is pegged at $18.02 billion, implying 13% growth from the year-ago quarter's reported figure.
For quarterly earnings, the Zacks Consensus Estimate is pegged at $1.52, suggesting growth of 15.2% from the prior-year quarter’s reported figure. The consensus mark has moved up by a penny in the past seven days.
In the last reported quarter, the company’s bottom line beat the Zacks Consensus Estimate by 8.04%. It delivered an earnings surprise of 6.8%, on average, in the trailing four quarters.
PepsiCo has been witnessing robust growth, backed by resilience and strength in the global snacks and foods business along with accelerated growth in the beverage category. It has been benefiting from its strong portfolio of brands, a responsive supply chain and flexible go-to-market systems, which have helped maintain continued supplies. Further, robust pricing and volume gains have been aiding its performance.
The company’s second-quarter results are expected to gain from the persistent demand for home breakfast and lite snacking trends, which has been bolstering sales at its Frito-Lay business. Notably, Frito-Lay has gained market share in both macro-snack and salty snack categories. Its revenues reflect gains from continuous efforts to refresh the flavors and introduce consumer-centric innovations like Doritos 3D Crunch and Cheetos Crunch Pop Mix. Revenue growth across all major brands, including Ruffles, Tostitos, Doritos, and Lay’s, has been key drivers.
Additionally, the company is expected to have benefited from the transforming trends in the beverage business due to increased health-consciousness, personal well-being, natural ingredients, varied flavors and better experience, which are changing consumers’ consumption patterns. Consciousness for active lifestyle and healthy eating habits have given prominence to natural, plant-based and organic ingredients in food and beverages.
PepsiCo’s second-quarter results are anticipated to reflect gains from the consumption patterns, owing to its brands like Bubbly, Starbucks, Mountain Dew, Gatorade and Pepsi. Also, the robust trends in the energy drink category, with the launch of Mountain Dew Rise Energy, and efforts to revitalize the Rockstar products are expected to be accretive to second-quarter results. Moreover, the market share trend for the liquid refreshment beverage category has been improving, with share gains in carbonated soft drinks, teas, juices and sparkling water.
The snacks/food business is likely to have benefited from continued at-home consumption trends, which have been a tailwind from the onset of the pandemic. Notably, the stay-at-home trend has resulted in evolved consumer eating habits, giving a rise to at-home breakfast, snacking and dinner occasions. Gains from the persistence of the trend are expected to get reflected in the company’s Frito-Lay and Quaker food businesses.
Further, the company’s beverage business has been witnessing growth, as evident from organic volume growth reported since third-quarter 2020. Elevated at-home consumption trends in North America are likely to have aided the PBNA segment sales in the to-be-reported quarter. Market share gains in the liquid refreshment beverage category, with share gains in the total juices and juice drinks, ready-to-drink tea and coffee, and sparkling water categories, are also expected to have been tailwinds. The company has been witnessing robust trends in the energy drinks category, with the relaunch of Rockstar with refreshed packaging and graphics.
However, PepsiCo has been witnessing soft margins due to incremental COVID-related costs, which are expected to have persisted in the second quarter. An increase in certain operating costs, including incremental transportation and information technology costs, is expected to have weighed on core operating margin. Adverse currency rates also remain a headwind.
Zacks Model
Our proven model conclusively predicts an earnings beat for PepsiCo this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
PepsiCo has a Zacks Rank #3 and an Earnings ESP of +0.33%.
Other Stocks to Consider
Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat:
The Hershey Company (HSY - Free Report) presently has an Earnings ESP of +3.97% and a Zacks Rank #3.
Mondelez International, Inc. (MDLZ - Free Report) has an Earnings ESP of +4.04% and a Zacks Rank #3 at present.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Image: Bigstock
Here's Why PepsiCo (PEP) Looks Poised for Earnings Beat in Q2
PepsiCo, Inc. (PEP - Free Report) is expected to register top and bottom-line growth when it reports second-quarter 2021 numbers on Jul 13, before the opening bell. The Zacks Consensus Estimate for second-quarter revenues is pegged at $18.02 billion, implying 13% growth from the year-ago quarter's reported figure.
For quarterly earnings, the Zacks Consensus Estimate is pegged at $1.52, suggesting growth of 15.2% from the prior-year quarter’s reported figure. The consensus mark has moved up by a penny in the past seven days.
In the last reported quarter, the company’s bottom line beat the Zacks Consensus Estimate by 8.04%. It delivered an earnings surprise of 6.8%, on average, in the trailing four quarters.
PepsiCo, Inc. Price and EPS Surprise
PepsiCo, Inc. price-eps-surprise | PepsiCo, Inc. Quote
Key Factors to Note
PepsiCo has been witnessing robust growth, backed by resilience and strength in the global snacks and foods business along with accelerated growth in the beverage category. It has been benefiting from its strong portfolio of brands, a responsive supply chain and flexible go-to-market systems, which have helped maintain continued supplies. Further, robust pricing and volume gains have been aiding its performance.
The company’s second-quarter results are expected to gain from the persistent demand for home breakfast and lite snacking trends, which has been bolstering sales at its Frito-Lay business. Notably, Frito-Lay has gained market share in both macro-snack and salty snack categories. Its revenues reflect gains from continuous efforts to refresh the flavors and introduce consumer-centric innovations like Doritos 3D Crunch and Cheetos Crunch Pop Mix. Revenue growth across all major brands, including Ruffles, Tostitos, Doritos, and Lay’s, has been key drivers.
Additionally, the company is expected to have benefited from the transforming trends in the beverage business due to increased health-consciousness, personal well-being, natural ingredients, varied flavors and better experience, which are changing consumers’ consumption patterns. Consciousness for active lifestyle and healthy eating habits have given prominence to natural, plant-based and organic ingredients in food and beverages.
PepsiCo’s second-quarter results are anticipated to reflect gains from the consumption patterns, owing to its brands like Bubbly, Starbucks, Mountain Dew, Gatorade and Pepsi. Also, the robust trends in the energy drink category, with the launch of Mountain Dew Rise Energy, and efforts to revitalize the Rockstar products are expected to be accretive to second-quarter results. Moreover, the market share trend for the liquid refreshment beverage category has been improving, with share gains in carbonated soft drinks, teas, juices and sparkling water.
The snacks/food business is likely to have benefited from continued at-home consumption trends, which have been a tailwind from the onset of the pandemic. Notably, the stay-at-home trend has resulted in evolved consumer eating habits, giving a rise to at-home breakfast, snacking and dinner occasions. Gains from the persistence of the trend are expected to get reflected in the company’s Frito-Lay and Quaker food businesses.
Further, the company’s beverage business has been witnessing growth, as evident from organic volume growth reported since third-quarter 2020. Elevated at-home consumption trends in North America are likely to have aided the PBNA segment sales in the to-be-reported quarter. Market share gains in the liquid refreshment beverage category, with share gains in the total juices and juice drinks, ready-to-drink tea and coffee, and sparkling water categories, are also expected to have been tailwinds. The company has been witnessing robust trends in the energy drinks category, with the relaunch of Rockstar with refreshed packaging and graphics.
However, PepsiCo has been witnessing soft margins due to incremental COVID-related costs, which are expected to have persisted in the second quarter. An increase in certain operating costs, including incremental transportation and information technology costs, is expected to have weighed on core operating margin. Adverse currency rates also remain a headwind.
Zacks Model
Our proven model conclusively predicts an earnings beat for PepsiCo this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
PepsiCo has a Zacks Rank #3 and an Earnings ESP of +0.33%.
Other Stocks to Consider
Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat:
Archer Daniels Midland Company (ADM - Free Report) currently has an Earnings ESP of +1.04% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Hershey Company (HSY - Free Report) presently has an Earnings ESP of +3.97% and a Zacks Rank #3.
Mondelez International, Inc. (MDLZ - Free Report) has an Earnings ESP of +4.04% and a Zacks Rank #3 at present.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>