Coronavirus-led disruptions in social gatherings and outdoor dining have cast a pall on the beverage industry. Sluggish consumer footfall in away-from-home channels such as restaurants, cafes, bars, sporting events and movie theaters hurt several players in the beverage space. Travel restrictions also hampered sales. Moreover, supply-chain disruptions and delayed shipments have been detrimental to the performance of companies in this space.
Nevertheless, as restrictions eased, the beverage industry started recovering. Re-opening of away-from-home outlets and increased outdoor dining led to rise in sales opportunities. With the tides turning, beverage companies are expected to witness improved sequential sales trends.
Moreover, rise in at-home consumption amid the pandemic turned out to be a boon for the beverage industry players. In fact, higher stay at-home practices led to increased at-home consumption of coffee. Also, sales of soft drinks, milk shakes and other beverages sold across retail outlets witnessed growth. Higher at-home consumption of alcoholic beverages is also an upside.
Further, beverage companies have been investing in digital platforms, as consumers have shifted toward online purchases. Apart from these, continued innovation in terms of ingredients, formulation and packaging is aiding players in this space. Markedly, rise in consumer preferences toward healthy drinks in alcoholic and non-alcoholic categories have been encouraging companies to explore and develop new offerings. These aspects are likely to have supported performance of the companies this earnings season.
That said, let’s take a closer look at two beverage stocks from the Zacks Consumer Staples sector that are slated to report fourth-quarter 2020 financial results on Feb 11. Per the latest Earnings Preview, the total earnings of the Consumer Staples sector are projected to witness year-over-year growth of 0.7% on 2.4% higher revenues. This compares with 6.3% growth in earnings and 0.4% decline in revenues during third-quarter 2020.
According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
What’s in the Cards for Pepsi?
PepsiCo, Inc.’s (PEP - Free Report) fourth-quarter top line is likely to have gained from higher at-home breakfast, snacking and dinning occasions amid the pandemic. Notably, PepsiCo is witnessing strong growth in energy drinks and ready-to-drink coffee products. Further, the company has been benefiting from consumers’ shift toward making online purchases amid the pandemic. It is also benefiting from a strong portfolio of brands, a responsive supply chain and flexible go-to-market systems. Additionally, robust pricing and volume gains have been tailwinds. The company currently carries a Zacks Rank #3 and an Earnings ESP of +0.59%.
Notably, the Zacks Consensus Estimate for fourth-quarter revenues is pegged at $21.99 billion, suggesting 6.6% growth from the year-ago quarter's reported figure. For quarterly earnings, the Zacks Consensus Estimate is pegged at $1.45, same as the prior-year quarter’s reported figure. Notably, the consensus mark has been unchanged in the past 30 days. The company has a trailing four-quarter earnings surprise of 6%, on average. (Read More: Is PepsiCo Likely to Deliver an Earnings Beat in Q4?)
You can see the complete list of today’s Zacks #1 Rank stocks here.
Here’s How Molson Coors is Placed
During the fourth quarter, Molson Coors Beverage Company (TAP - Free Report) is likely to have witnessed a slowdown in volumes due to pandemic-led closure of on-premise channels, which has been a major contributor to sales. Moreover, unfavorable channel mix across major markets and a decline in financial volume due to on-premise restrictions are expected to have partly hurt sales in the fourth quarter. Nevertheless, benefits from premiumization, pricing and gains from cost-saving efforts are likely to have provided some cushion. The company currently carries a Zacks Rank #3 and an Earnings ESP of +3.28%.
Markedly, the Zacks Consensus Estimate for fourth-quarter revenues is pegged at $2,408 million, suggesting a 3.2% decline from the prior-year quarter’s reported figure. For quarterly earnings, the Zacks Consensus Estimate is pegged at 76 cents that suggests a 25.5% decline from the year-ago quarter’s reported figure. The consensus mark has moved down 2 cents in the past 30 days. The company has a trailing four-quarter earnings surprise of 61.3%, on average. (Read More: Molson Coors to Report Q4 Earnings: Is a Beat in Store?)
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Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Coronavirus-led disruptions in social gatherings and outdoor dining have cast a pall on the beverage industry. Sluggish consumer footfall in away-from-home channels such as restaurants, cafes, bars, sporting events and movie theaters hurt several players in the beverage space. Travel restrictions also hampered sales. Moreover, supply-chain disruptions and delayed shipments have been detrimental to the performance of companies in this space.
Nevertheless, as restrictions eased, the beverage industry started recovering. Re-opening of away-from-home outlets and increased outdoor dining led to rise in sales opportunities. With the tides turning, beverage companies are expected to witness improved sequential sales trends.
Moreover, rise in at-home consumption amid the pandemic turned out to be a boon for the beverage industry players. In fact, higher stay at-home practices led to increased at-home consumption of coffee. Also, sales of soft drinks, milk shakes and other beverages sold across retail outlets witnessed growth. Higher at-home consumption of alcoholic beverages is also an upside.
Further, beverage companies have been investing in digital platforms, as consumers have shifted toward online purchases. Apart from these, continued innovation in terms of ingredients, formulation and packaging is aiding players in this space. Markedly, rise in consumer preferences toward healthy drinks in alcoholic and non-alcoholic categories have been encouraging companies to explore and develop new offerings. These aspects are likely to have supported performance of the companies this earnings season.
That said, let’s take a closer look at two beverage stocks from the Zacks Consumer Staples sector that are slated to report fourth-quarter 2020 financial results on Feb 11. Per the latest Earnings Preview, the total earnings of the Consumer Staples sector are projected to witness year-over-year growth of 0.7% on 2.4% higher revenues. This compares with 6.3% growth in earnings and 0.4% decline in revenues during third-quarter 2020.
According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
What’s in the Cards for Pepsi?
PepsiCo, Inc.’s (PEP - Free Report) fourth-quarter top line is likely to have gained from higher at-home breakfast, snacking and dinning occasions amid the pandemic. Notably, PepsiCo is witnessing strong growth in energy drinks and ready-to-drink coffee products. Further, the company has been benefiting from consumers’ shift toward making online purchases amid the pandemic. It is also benefiting from a strong portfolio of brands, a responsive supply chain and flexible go-to-market systems. Additionally, robust pricing and volume gains have been tailwinds. The company currently carries a Zacks Rank #3 and an Earnings ESP of +0.59%.
Notably, the Zacks Consensus Estimate for fourth-quarter revenues is pegged at $21.99 billion, suggesting 6.6% growth from the year-ago quarter's reported figure. For quarterly earnings, the Zacks Consensus Estimate is pegged at $1.45, same as the prior-year quarter’s reported figure. Notably, the consensus mark has been unchanged in the past 30 days. The company has a trailing four-quarter earnings surprise of 6%, on average. (Read More: Is PepsiCo Likely to Deliver an Earnings Beat in Q4?)
You can see the complete list of today’s Zacks #1 Rank stocks here.
Here’s How Molson Coors is Placed
During the fourth quarter, Molson Coors Beverage Company (TAP - Free Report) is likely to have witnessed a slowdown in volumes due to pandemic-led closure of on-premise channels, which has been a major contributor to sales. Moreover, unfavorable channel mix across major markets and a decline in financial volume due to on-premise restrictions are expected to have partly hurt sales in the fourth quarter. Nevertheless, benefits from premiumization, pricing and gains from cost-saving efforts are likely to have provided some cushion. The company currently carries a Zacks Rank #3 and an Earnings ESP of +3.28%.
Markedly, the Zacks Consensus Estimate for fourth-quarter revenues is pegged at $2,408 million, suggesting a 3.2% decline from the prior-year quarter’s reported figure. For quarterly earnings, the Zacks Consensus Estimate is pegged at 76 cents that suggests a 25.5% decline from the year-ago quarter’s reported figure. The consensus mark has moved down 2 cents in the past 30 days. The company has a trailing four-quarter earnings surprise of 61.3%, on average. (Read More: Molson Coors to Report Q4 Earnings: Is a Beat in Store?)
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.9% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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