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Will Strong Brand Portfolio Aid PepsiCo's (PEP) Q1 Earnings?
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PepsiCo, Inc. (PEP - Free Report) is set to report first-quarter 2020 results on Apr 28, before market open. In the last reported quarter, the company delivered a positive earnings surprise of 1.4%. Moreover, its bottom line beat the Zacks Consensus Estimate over the trailing four quarters, delivering a surprise of 3.6%, on average.
The Zacks Consensus Estimate for first-quarter earnings is pegged at $1.01, implying a 4.1% increase from the year-earlier quarter's reported figure. Notably, the consensus mark has moved down in the past 30 days. For quarterly revenues, the Zacks Consensus Estimate stands at $13.16 billion, suggesting 2.2% growth from the prior-year quarter’s reported figure.
Key Factors to Note
Robust gains across all operating segments as well as strength in product and geographic portfolios, and progress on productivity targets have been driving the company’s earnings and sales performance. Notably, the effects of cost savings from its productivity and restructuring plans are likely to get reflected in its margins for the to-be-reported quarter.
Moreover, PepsiCo has the competitive advantage of selling complementary food categories — snacks and beverages. Despite the coronavirus pandemic taking a toll on business everywhere, the company is likely to have benefited from its strong portfolio that includes water, sports drinks and juice brands. Additionally, it has been a prime beneficiary of snack pantry-loading by consumers due to the coronavirus crisis. The company plans to hire 6,000 full-time, full-benefit frontline employees across the United States to keep the frontline supply of goods ongoing.
Furthermore, PepsiCo generates significant part of its revenues from outside the United States. The company has been continuously working with its partners to make products available on store shelves across all countries during these tough times. Its efforts are likely to have contributed to revenue gains in the to-be-reported quarter.
However, the company has been grappling with higher SG&A expenses, which have been hurting the operating margin. Adverse currency rates are also likely to have hurt the company’s performance. Moreover, industry headwinds and stiff competition might have been drags.
Zacks Model
Our proven model does not predict 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. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Although PepsiCo carries a Zacks Rank #3 but an Earnings ESP of -0.10% makes surprise prediction difficult.
Stocks to Consider
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
Kellogg Company (K - Free Report) presently has an Earnings ESP of +4.60% and a Zacks Rank #2.
Church & Dwight Co., Inc. (CHD - Free Report) currently has an Earnings ESP of +3.56% and a Zacks Rank #2.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
Will Strong Brand Portfolio Aid PepsiCo's (PEP) Q1 Earnings?
PepsiCo, Inc. (PEP - Free Report) is set to report first-quarter 2020 results on Apr 28, before market open. In the last reported quarter, the company delivered a positive earnings surprise of 1.4%. Moreover, its bottom line beat the Zacks Consensus Estimate over the trailing four quarters, delivering a surprise of 3.6%, on average.
The Zacks Consensus Estimate for first-quarter earnings is pegged at $1.01, implying a 4.1% increase from the year-earlier quarter's reported figure. Notably, the consensus mark has moved down in the past 30 days. For quarterly revenues, the Zacks Consensus Estimate stands at $13.16 billion, suggesting 2.2% growth from the prior-year quarter’s reported figure.
Key Factors to Note
Robust gains across all operating segments as well as strength in product and geographic portfolios, and progress on productivity targets have been driving the company’s earnings and sales performance. Notably, the effects of cost savings from its productivity and restructuring plans are likely to get reflected in its margins for the to-be-reported quarter.
PepsiCo, Inc. Price and EPS Surprise
PepsiCo, Inc. price-eps-surprise | PepsiCo, Inc. Quote
Moreover, PepsiCo has the competitive advantage of selling complementary food categories — snacks and beverages. Despite the coronavirus pandemic taking a toll on business everywhere, the company is likely to have benefited from its strong portfolio that includes water, sports drinks and juice brands. Additionally, it has been a prime beneficiary of snack pantry-loading by consumers due to the coronavirus crisis. The company plans to hire 6,000 full-time, full-benefit frontline employees across the United States to keep the frontline supply of goods ongoing.
Furthermore, PepsiCo generates significant part of its revenues from outside the United States. The company has been continuously working with its partners to make products available on store shelves across all countries during these tough times. Its efforts are likely to have contributed to revenue gains in the to-be-reported quarter.
However, the company has been grappling with higher SG&A expenses, which have been hurting the operating margin. Adverse currency rates are also likely to have hurt the company’s performance. Moreover, industry headwinds and stiff competition might have been drags.
Zacks Model
Our proven model does not predict 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. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Although PepsiCo carries a Zacks Rank #3 but an Earnings ESP of -0.10% makes surprise prediction difficult.
Stocks to Consider
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
The Hain Celestial Group, Inc. (HAIN - Free Report) has an Earnings ESP of +9.24% and it currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kellogg Company (K - Free Report) presently has an Earnings ESP of +4.60% and a Zacks Rank #2.
Church & Dwight Co., Inc. (CHD - Free Report) currently has an Earnings ESP of +3.56% and a Zacks Rank #2.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>