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PepsiCo (PEP) to Report Q1 Earnings: Is a Beat in Store?

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PepsiCo, Inc. (PEP - Free Report) is expected to register top and bottom-line growth when it reports first-quarter 2021 numbers on Apr 15, before the opening bell. The Zacks Consensus Estimate for first-quarter revenues is pegged at $14.59 billion, implying 5.1% growth from the year-ago quarter's reported figure.

For quarterly earnings, the Zacks Consensus Estimate is pegged at $1.12, suggesting growth of 4.7% from the prior-year quarter’s reported figure. Notably, the consensus mark has been unchanged in the past 30 days.

In the last reported quarter, the company’s bottom line beat the Zacks Consensus Estimate by 1.4%. Moreover, it delivered an earnings surprise of 6%, on average, in the trailing four quarters.

PepsiCo, Inc. Price and EPS Surprise

 

PepsiCo, Inc. Price and EPS Surprise

PepsiCo, Inc. price-eps-surprise | PepsiCo, Inc. Quote

Key Factors to Note

PepsiCo has been displaying strength amid the coronavirus pandemic, backed by resilience and strength in the global snacks and foods business along with accelerated growth in the beverage category. It has been benefiting from its strong portfolio of brands, a responsive supply chain and flexible go-to-market systems, which have helped maintain continued supplies. Further, robust pricing and volume gains have been aiding its performance.

The snacks/food business is likely to have benefited from continued at-home consumption trends, which have been a tailwind since the onset of the pandemic. Notably, the stay-at-home trend has resulted in evolved consumer eating habits, giving rise to at-home breakfast, snacking and dinner occasions. Gains from the persistence of this trend are expected to get reflected in the company’s Frito-Lay and Quaker food businesses.

Further, the company’s beverage business has been witnessing growth, as evident from organic volume growth reported since third-quarter 2020. Elevated at-home consumption trends in North America are likely to have aided the PBNA segment sales in the to-be-reported quarter. Moreover, market share gains in the liquid refreshment beverage category, with share gains in the total juices and juice drinks, ready-to-drink tea and coffee, and sparkling water categories, are expected to have been tailwinds. Further, the company has been witnessing robust trends in the energy drinks category, with the relaunch of Rockstar with refreshed packaging and graphics.

However, PepsiCo has been witnessing soft margins due to incremental COVID-related costs, which are expected to have persisted in the first quarter.

Zacks Model

Our proven model conclusively predicts an earnings beat for PepsiCo this time around. 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.

PepsiCo has a Zacks Rank #3 and an Earnings ESP of +0.67%.

Other Stocks to Consider

Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat:

Kimberly-Clark Corporation (KMB - Free Report) presently has an Earnings ESP of +0.13% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Altria Group, Inc. (MO - Free Report) currently has an Earnings ESP of +1.10% and a Zacks Rank #3.

Tyson Foods, Inc. (TSN - Free Report) has an Earnings ESP of +16.03% and a Zacks Rank #3 at present.

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