Credit Suisse On Pepsi Earnings: Organic Growth Benefits From Pricing

In a report published Friday, Credit Suisse analysts maintained a Neutral rating on

, with a price target of $105, after the company reported its 1Q15 results. The company reported its F1Q EPS beat at $0.83, ahead of expectations. Organic sales growth was reported at 4.4 percent, versus the Credit Suisse estimate of 3.8 percent. The beat was driven by strong pricing, especially in Latin America Foods. PepsiCo indicated increased currency headwinds, guiding to a 10 percent hit on the top-line and an 11 percent hit on EPS, up from its prior projection of 7 percent for both. This implies "core EPS of $4.44 versus the company's previous guidance of $4.63," the anlaysts said. "PEP management remains confident about the efficiency wins (and future opportunities) along with the seamless customer service that the company is able to provide under an integrated operating system. The company also remarked that the pricing environment in the U.S. remains disciplined," the analysts wrote. The EPS estimates for FY15, FY16 and FY17 have been reduced from $4.64 to $4.44, from $5.04 to $4.82 and from $5.49 to $5.25, respectively, to reflect a larger currency impact.