The New York-based PepsiCo, Inc. (PEP) is a leading global company in the convenient foods and beverages industry. Valued at a market cap of $237 billion, the company offers a diverse portfolio of iconic brands across seven segments worldwide.
Shares of this beverage giant have underperformed the broader market over the past 52 weeks. PEP has declined 6.9% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 19.7%. In 2024, shares of PEP are up marginally compared to SPX’s 12.1% gain on a YTD basis.
However, zooming in further, PEP’s single-digit dip over the past 52 weeks is less pronounced than the Nasdaq Food & Beverage ETF’s (FTXG) 7.3% decline during the same period.
Shares of PepsiCo rose marginally on Jul. 11 despite higher-than-expected Q2 earnings due to weaker-than-anticipated revenue and declining sales volumes in North America, as customers pulled back on purchases amid ongoing price hikes. Additionally, the company's cautious outlook for organic revenue growth, coupled with ongoing challenges in key segments like Frito-Lay and Quaker Foods, tempered investor optimism.
For the current fiscal year, ending in December, analysts expect PEP’s EPS to grow nearly 7% year over year to $8.15. The company’s earnings surprise history is promising. It beat the consensus estimates in each of the last four quarters.
Among the 18 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on 10 “Strong Buy” ratings and eight “Holds.”
The configuration is slightly less bullish than three months ago, with 11 analysts suggesting a “Strong Buy.”
On Aug. 1, Jefferies analyst Kaumil Gajrawala maintained a “Buy” rating on PepsiCo and set the target price at $200. This newly assigned target suggests a potential upside of 16.8% from current levels.
The mean price target of $186.06 represents a premium of 8.5% to PEP’s current levels. The Street-high price target of $202, implies a potential upside of 17.8% from the current price level.
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.
