With a market cap of $225.4 billion, PepsiCo, Inc. (PEP) operates in the food and beverage industry, manufacturing and distributing snacks, beverages, and other consumables globally. The Purchase, New York-based company reaches consumers worldwide through diverse distribution channels, including direct delivery, warehouses, and e-commerce.
Shares of PepsiCo have underperformed the broader market over the past 52 weeks. PEP has declined 1.4% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 35.9%. In 2024, shares of PEP are down 3.1%, compared to SPX’s 25.8% gain on a YTD basis.
Focusing more closely, PepsiCo has also lagged behind the Consumer Staples Select Sector SPDR Fund’s (XLP) 16.9% gain over the past 52 weeks and an 11.9% YTD return.
PepsiCo's shares rose 1.9% on Oct. 8, driven by its Q3 earnings beat, with core EPS of $2.31 surpassing analyst expectations and increasing 2.7% year-over-year. Despite reporting weaker-than-expected revenue of $23.3 billion, the company posted strong international performance, with organic revenue growth of 4% and significant volume growth. Additionally, the company reaffirmed its forecast of at least 8% core EPS growth for 2024, further boosting investor sentiment.
For the current fiscal year, ending in December, analysts expect PEP’s EPS to grow around 7% year-over-year to $8.15. The company's earnings surprise history is promising. It beat the consensus estimates in the last four quarters.
Among the 19 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on eight “Strong Buy” ratings, 10 “Holds,” and one “Strong Sell.”
This configuration is less bullish than three months ago, with 10 “Strong Buy” ratings on the stock.
On Oct. 10, Deutsche Bank cut PepsiCo’s price target to $179 and maintained a "Hold” rating, citing weakened sales momentum despite steady 2024 earnings. The firm sees a potential upside if U.S. demand improves through PepsiCo’s interventions.
As of writing, PEP is trading below the mean price target of $183.28. The Street-high price target of $200, implies a potential upside of 22.1% from the current price.
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On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
