• Kumar

Happier Days Ahead For PepsiCo’s Investors?

PepsiCo, Inc. (NYSE: PEP)

  • Earnings Announce date 7/13/2020 (Pre-Market)

  • Consensus EPS Estimate for Q2 2020 is $1.25

  • Consensus Revenue Estimate for Q2 2020 is $15.48B

  • EPS Revisions the past 90 days include 16 downward

Cans of Pepsi. Photo: Instagram/@peps

PepsiCo, Inc. PEP is set to report second-quarter 2020 results on Jul 13, before the market open. In the last reported quarter, the company delivered a positive earnings surprise of 4.9%. Investors are hoping the snack-and-beverage giant will see a continued benefit from at-home munching.

Pepsi stock is down just under 2% year to date, putting it just ahead of the broader market’s decline and the 5.1% loss seen by peers tracked by the Consumer Staples Select Sector SDPR ETF (XLP).

Pepsi has gotten a boost from the pandemic, as more people are passing the time during lockdown by snacking, pushing up sales for the salty-snack category where its Frito-Lay brands are a major player.

The company launched two online sites on May 11

While the coronavirus outbreak has been wreaking havoc everywhere, PepsiCo has been seeing many opportunities with some risks in the situation. The company has been evaluating various stages of the pandemic and the resulting consumer behavior and has been adjusting supplies accordingly to serve consumers better. The social distancing and shelter-in-place norms have shifted consumption habits more toward at-home channels, reflecting a marked increase in the e-commerce channel and increased basket size. To capitalize on the growing digital commerce trends, the company launched two online sites on May 11 for consumers to shop during the coronavirus pandemic and beyond. The sites, namely PantryShop.com and Snacks.com, offer all of PepsiCo’s beverage, snack and food assortments. The sites were developed keeping the current scenario in mind, taking care of the consumers’ new normal of working and exercising at home, and homeschooling. Gains from the launch of these sites are expected to get reflected in the company’s top-line results for the second quarter.

Analysts’ Opinion on PepsiCo, Inc.

Many brokerage firms have already submitted their reports for PEP stocks, with Goldman repeating the rating for PEP shares by setting it to “Buy”. The predicted price for PEP socks in the upcoming period according to Goldman is $140 based on the research report published on April 1, 2020.

DZ Bank, on the other hand, stated in their research note that they expect to see PEP stock at the price of $136. The rating they have provided for PEP stocks is “Buy” according to the report published on March 27, 2020.

Credit Suisse gave “Outperform” rating to PEP stocks, setting the target price at $144 in the report published on March 27, 2020.

We are neutral to bullish on PepsiCo.