Pepsico (PEP:NYE) Beats on Earnings, Analysts Rate as “Hold”

Pepsico Earnings

PepsiCo Inc., the giant beverage company, announced that it will not raise its soda and snack prices further in 2023, after multiple rounds of price hikes in the previous year. The near duopoly that PepsiCo holds in the carbonated drinks market along with Coca-Cola, allowed the company to raise its prices with limited resistance from consumers. The move was in response to the increasing freight and commodity costs, as well as the impact of a stronger dollar on international revenue. Despite the inflationary pressures that are expected to persist this year, PepsiCo sees consumer demand as being resilient.

PepsiCo Chief Financial Officer, Hugh Johnston, states the company has already put most of its price increases for the year in place. He stated that the slowdown in pricing should ultimately be offset by better volumes and demand for non-alcoholic beverage products.

PepsiCo’s North America beverages unit, which houses brands such as Mirinda, 7UP, and Gatorade, posted an organic revenue growth of 10% in the fourth quarter of 2022. The average prices jumped by 16%, while organic volume slipped by 2%. The Frito-Lay maker, however, forecasted an annual profit below the analysts’ estimates and expects some pushback on prices in the second half of 2023.

On an adjusted basis, PepsiCo earned $1.67 per share in the fourth quarter, beating the estimates of $1.65, according to Refinitiv data. The company’s shares rose by 1.7% to $174.04, following the announcement of its fourth-quarter results and the raising of its annual dividend by 10% to $5.06 per share.

PepsiCo’s decision not to raise its soda and snack prices further this year is a result of its strong position in the carbonated drinks market and the expected resilience of consumer demand. Despite some expected pushback on prices in the second half of the year, the company is optimistic about its future outlook. The fourth-quarter results showed growth in the North America beverages unit and beat the analysts’ estimates, leading to an increase in the company’s shares.

PEP Stock Price Forecast & Analysis

PepsiCo Inc’s stock has been the subject of analysis by 12 financial experts who have made predictions about its future performance. Based on these predictions, the average target price for PepsiCo’s stock over the next 12 months is estimated to be USD 181.65. This indicates a positive outlook for the company’s stock in the near future.

However, the average analyst rating for PepsiCo’s stock is “Hold.” This suggests that while the company’s stock is expected to perform well in the coming year, the analysts are not overly optimistic about its performance. They believe that the stock is likely to perform similarly to the overall market and may not provide substantial returns for investors.

On the other hand, Stock Target Advisor’s own analysis of PepsiCo’s stock is “Slightly Bullish.” This is based on 11 positive signals and 7 negative signals, which suggest that the company’s stock may perform better than the overall market in the near future. The positive signals include the company’s strong brand recognition, its extensive product portfolio, and its healthy financials.

PepsiCo’s stock price was USD 171.16 at the last closing. Over the past week, the company’s stock price has changed by -0.23%. Over the past month, the stock price has declined by 5.49%, and over the past year, the price has changed by -0.50%. These changes in stock price reflect the company’s overall performance and the impact of market factors on its stock.

The average target price for PepsiCo’s stock over the next 12 months is USD 181.65, according to the predictions made by 12 financial experts. The average analyst rating is “Hold,” while Stock Target Advisor’s own analysis of the stock is “Slightly Bullish.” The company’s stock price has changed by -0.23% over the past week, -5.49% over the past month, and -0.50% over the last year.

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