PepsiCo's EPS seen flat as investors eye consumer spending
PEP•Analysts expect PepsiCo to report adjusted third-quarter EPS of $2.29, unchanged from a year earlier, on revenue up about 4% to $24.96 billion. Investors are watching for signs of pressure from tighter consumer budgets.
1. Earnings expectations
Wall Street expects PepsiCo to post adjusted EPS of $2.29 for the third quarter, unchanged year over year, and revenue of $24.96 billion, up about 4%. The company is due to report results before the bell on Thursday.
2. Consumer spending concerns
In the prior quarter, PepsiCo beat revenue estimates but warned of moderating performance in North America as consumer budgets tightened. The company is grappling with cost pressures and the threat of GLP-1 weight-loss drugs, while facing growth and margin targets set after activist investor Elliott Management took a roughly $4 billion stake a year ago.
3. Shares and analyst views
PepsiCo shares fell 1.4% on Wednesday to $124.02 and were down about 14% year to date. The stock recently traded at 14 times forward earnings, below its five-year average of 21 times. Of 25 analysts, seven rated the shares strong buy or buy, 17 hold and one sell; the median price target was $152, down from $170 on July 7.
