PepsiCo (PEP) is set to release its Q3 earnings report tomorrow, which is highly anticipated by investors and analysts. The company, a leading player in the non-alcoholic beverage sector, has experienced varying growth trends over the past year. As the market awaits this release, analysts provide mixed expectations for PepsiCo’s revenue and earnings growth.
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Expected Q3 Earnings of PepsiCo:
For the third quarter, analysts expect PepsiCo’s revenue to show a modest year-on-year increase of 1.4% to $23.78 billion, a slowdown from the 6.7% growth reported in the same quarter last year. Earnings per share (EPS) are forecasted to reach $2.29. However, there is a sense of caution among analysts as PepsiCo heads into this earnings season. In the past 30 days, analysts have revised their revenue estimates downward nine times, indicating growing concerns over PepsiCo’s performance. Notably, the company has missed Wall Street’s revenue expectations twice in the last two years, adding to the uncertainty surrounding this quarter’s results.
Stock Target Advisor’s Analysis on PepsiCo:
Stock Target Advisor has a Very Bearish outlook on PepsiCo, citing two negative signals and no positive ones in their analysis. The stock’s performance over the past year shows a 4.79% increase, but its recent trends have been less favorable. PepsiCo’s stock price fell by 2.03% over the past week and 9.37% over the past month, signaling a potential slowdown.
One of the key concerns raised by Stock Target Advisor is PepsiCo’s low earnings and revenue growth over the past five years compared to its sector. The stock’s five-year revenue growth stands at 41.46%, with a sector percentile ranking of just 30%. Additionally, its five-year earnings growth is negative at -27.5%, signaling below-median performance in the industry. The company’s lackluster performance has led to an overall “Very Bearish” sentiment from Stock Target Advisor, which aligns with the caution expressed by analysts regarding PepsiCo’s short-term prospects.
Conclusion:
PepsiCo’s upcoming Q3 earnings report is under scrutiny, with analysts expressing cautious optimism for modest revenue growth. However, the nine downward revenue estimate revisions in the past month reflect a growing bearish sentiment ahead of the announcement. Investors and market watchers will be keen to see if PepsiCo can defy the bearish expectations and deliver a positive surprise in its Q3 report.
Muzzammil is a content writer at Stock Target Advisor. He has been writing stock news and analysis at Stock Target Advisor since 2023 and has worked in the financial domain in various roles since 2020. He has previously worked on an equity research firm that analyzed companies listed on the stock markets in the U.S. and Canada and performed fundamental and qualitative analyses of management strength, business strategy, and product/services forecast as indicated by major brokers covering the stock.
