Market Overview

PepsiCo Expected To Deliver Single-Digit YoY Decline

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PepsiCo, Inc. (NYSE: PEP) is scheduled to report second quarter financial results Thursday before the market opens.

According to Estimize, the famed foods and beverages maker is expected to report a year-over-year decline in earnings of roughly 5 percent to 7 percent.

In the second quarter of 2014, earnings came in at $1.32 per share, and revenue at $16.894 billion, both up 1 percent year-over-year. However, for the current quarter, the Street is modeling a decline to earnings of $1.23 per share on sales of $15.813 billion, while the crowd is projecting earnings of $1.25 per share on revenue of $15.925 billion.

It should be noted from the chart above, which illustrates the evolution of sentiment over time, that expectations were not always that low. By the beginning of the quarter, both the crowd and experts anticipated a small year-over-year increase in earnings. Nonetheless, this changed as the report date loomed.

PepsiCo has a history of surpassing estimates, as noted in the first chart.

In a recent article, analysts at Zacks also previewed PepsiCo’s earnings. According to the note, the company did well in 2014 and so far this year, even in spite of a challenging global macro environment and currency headwinds.

However, these headwinds are expected to continue through 2015. Zacks expect currency to negatively impact second quarter earnings by 12 percent, and revenue by 11 percent. Interest expenses and tax rates are expected to surge in relation to last year, as well.

Latest Ratings for PEP

DateFirmActionFromTo
Oct 2020CitigroupUpgradesNeutralBuy
Oct 2020Truist SecuritiesMaintainsHold
Oct 2020Morgan StanleyMaintainsOverweight

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