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PepsiCo & 4 More Endearing Beverage Stocks Set to Cheer in 2024
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PepsiCo Inc. (PEP - Free Report) has been maintaining a sweet spot in the soft drinks market, thanks to accelerated growth in its global beverage and convenient food businesses, positioning it for near-term improvements. This reflects the strength of its diversified portfolio. The company has been a key beneficiary of its presence in the snacking and food category, along with its beverage profile.
Strength and resilience across categories, modernized supply chain, improved digital capabilities, flexible go-to-market distribution systems and robust consumer demand trends have been the key to its growth story.
PEP’s productivity and cost-saving plans also bode well. PepsiCo has been continually focused on driving greater efficiency and effectiveness by cutting costs and plowing back these savings to develop scale and core capabilities. The company is on track with its goal of generating productivity savings of at least $1 billion annually through 2023. It expects to achieve this productivity goal through its restructuring actions.
Based in Purchase, NY, the company delivered an earnings surprise of 5.6%, on average, in the trailing four quarters. The Zacks Consensus Estimate for the Zacks Rank #2 (Buy) company’s 2024 sales and earnings indicates increases of 4.6% and 7.5%, respectively, from the year-ago period’s reported levels.
Why the Beverage Industry Holds Potential
Beverages, be it non-alcoholic or alcoholic, have been crucial in celebrations or important occasions. The U.S. beverage industry is a dynamic and multi-faceted sector with enormous potential for growth and innovation. From iconic soft drinks to craft beers and innovative health drinks, the diversity within the industry reflects changing consumer preferences and demands.
The industry’s ability to adapt to changing consumer preferences, embrace health and wellness trends, foster a craft and artisanal movement, explore global markets, and leverage technology positions it for near-term growth. As the industry continues to evolve, it presents exciting opportunities for entrepreneurs, investors and consumers alike, making it a crucial driver of economic and cultural vitality in the United States.
The beverage industry has mainly been thriving on innovation and diversity. From traditional carbonated drinks to a surge in functional beverages and plant-based options, the industry has continually evolved to cater to the changing consumer needs. This adaptability fosters an environment, wherein players with innovative ideas can enter the market, contributing to a dynamic and competitive landscape.
Apart from innovation, players have been keen on advancements in technology and growth of e-commerce platforms, which have transformed the way consumers access and purchase beverages. Online platforms and direct-to-consumer models allow beverage companies to reach a wider audience, experiment with new distribution channels, and gather valuable consumer data for targeted marketing strategies. This has been crucial in boosting the top lines of industry participants.
With an increased focus on health and wellness, consumers are seeking beverages that align with their dietary preferences and lifestyles. Notably, consumers have been steering clear of sodas and drinks with a high alcohol content to stay healthy. Players in the beverage industry have responded to this trend by introducing a variety of health-focused options, such as low-sugar, organic and functional drinks. The incorporation of natural ingredients and the reduction of artificial additives have been further contributing to the industry's appeal in a health-conscious market.
Consequently, there has been a significant rise in demand for energy drinks, sports drinks, low-or-no-sugar carbonated drink variants, sparkling water, dairy, iced tea, juices and ready-to-drink coffee. Also, tequilas, hard seltzers and ready-to-drink cocktails have been gaining popularity, with the increased preference for drinks with low alcoholic content.
In a nutshell, these endeavors and the strong fundamentals place beverage companies well for continued growth in 2024. This makes the industry attractive for investment in the New Year.
4 More Stocks With Winning Streak
Apart from PepsiCo, we have identified four beverage stocks that have delivered earnings surprises in the trailing four quarters. These companies also have a Zacks Rank #1 (Strong Buy) or #2. Moreover, sales and earnings estimates of these companies suggest continued growth in 2024.
Fomento Economico Mexicano (FMX - Free Report) : Fomento Economico Mexicano, alias FEMSA, is witnessing robust trends from growth across all business units, owing to effective growth strategies and strong market demand. The company is also well-placed for growth through investments in digital and technology-driven initiatives, and continued strength in OXXO Mexico and OXXO Gas. FMX’s solid growth prospects, driven by its strategy of creating a distribution platform in the United States, bode well.
FEMSA has been gaining pace in the digital space through its tech and innovation business unit — Digital@FEMSA. The company is focused on building a value-added digital and financial ecosystem for end customers and businesses. Its strategy of creating a national distribution platform in the United States through the expansion of its footprint in the specialized distribution industry bodes well. The Zacks Consensus Estimate for FMX’s 2024 sales indicates a year-over-year rise of 8.6%. The company delivered an earnings surprise of 23.2%, on average, in the trailing four quarters. FEMSA currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Fomento Economico Mexicano S.A.B. de C.V. Price, Consensus and EPS Surprise
Molson Coors Beverage Company (TAP - Free Report) retains its market position, thanks to contributions from its revitalization plan, commitment toward innovation and the premiumization of its global portfolio. A strong portfolio performance, strength in both business units, and the continued momentum in Coors Light and Miller Lite in the United States have been aiding TAP’s performance. Additionally, the company has been focused on expanding into adjacent categories through its Beyond Beer approach. The strategy involves looking beyond its core beer portfolio to build powerful brands in fast-growing categories, without hampering the support for its existing large brands.
TAP’s aspiration to become a total beverage company positions it to draw consumer interest when they are looking for alternatives. This has been the key reason for the success of the Beyond Beer approach. The Zacks Rank #1 company delivered an earnings surprise of 41.3%, on average, in the trailing four quarters. The Zacks Consensus Estimate for its 2024 sales and earnings indicates increases of 0.5% and 2.6%, respectively, from the year-ago period’s reported levels.
Molson Coors Beverage Company Price, Consensus and EPS Surprise
The Coca-Cola Company (KO - Free Report) : The soft drink behemoth is poised for long-term growth on its efforts to streamline its portfolio and accelerate investments to expand its digital presence. It has been witnessing a splurge in e-commerce, with the growth rate of the channel doubling in many countries. It is strengthening consumer connections and piloting numerous digital-enabled initiatives through fulfillment methods to capture the online demand for at-home consumption.
Coca-Cola is diversifying its portfolio to tap into the rapidly growing RTD category. The company has been gaining from elasticity in the marketplace, improved price/mix and concentrate sales, and underlying share gains in at-home and away-from-home channels. The Zacks Consensus Estimate for KO’s 2024 sales and earnings suggests growth of 3.2% and 4.6%, respectively. The Zacks Rank #2 company delivered an earnings surprise of 5.1%, on average, in the trailing four quarters.
CocaCola Company (The) Price, Consensus and EPS Surprise
The Duckhorn Portfolio (NAPA - Free Report) : Formerly known as Mallard Intermediate, Inc., the company produces and sells wines in North America. Duckhorn’s brand equity, diversified omni-channel platform and highly flexible supply chain position it to capitalize on the heightened interest and demand for high-quality wine. These have been aiding NAPA’s sales and volume growth.
The Saint Helena, CA-based company sells wines to distributors. NAPA also sells the same directly to retail accounts and consumers. The Zacks Consensus Estimate for Duckhorn’s fiscal 2024 sales and earnings suggests growth of 12.4% and 8.5%, respectively, from the year-ago period’s reported figures. The Zacks Rank #2 company delivered an earnings surprise of 13.7%, on average, in the trailing four quarters.
The Duckhorn Portfolio, Inc. Price, Consensus and EPS Surprise
Image: Bigstock
PepsiCo & 4 More Endearing Beverage Stocks Set to Cheer in 2024
PepsiCo Inc. (PEP - Free Report) has been maintaining a sweet spot in the soft drinks market, thanks to accelerated growth in its global beverage and convenient food businesses, positioning it for near-term improvements. This reflects the strength of its diversified portfolio. The company has been a key beneficiary of its presence in the snacking and food category, along with its beverage profile.
Strength and resilience across categories, modernized supply chain, improved digital capabilities, flexible go-to-market distribution systems and robust consumer demand trends have been the key to its growth story.
PEP’s productivity and cost-saving plans also bode well. PepsiCo has been continually focused on driving greater efficiency and effectiveness by cutting costs and plowing back these savings to develop scale and core capabilities. The company is on track with its goal of generating productivity savings of at least $1 billion annually through 2023. It expects to achieve this productivity goal through its restructuring actions.
Based in Purchase, NY, the company delivered an earnings surprise of 5.6%, on average, in the trailing four quarters. The Zacks Consensus Estimate for the Zacks Rank #2 (Buy) company’s 2024 sales and earnings indicates increases of 4.6% and 7.5%, respectively, from the year-ago period’s reported levels.
Why the Beverage Industry Holds Potential
Beverages, be it non-alcoholic or alcoholic, have been crucial in celebrations or important occasions. The U.S. beverage industry is a dynamic and multi-faceted sector with enormous potential for growth and innovation. From iconic soft drinks to craft beers and innovative health drinks, the diversity within the industry reflects changing consumer preferences and demands.
The industry’s ability to adapt to changing consumer preferences, embrace health and wellness trends, foster a craft and artisanal movement, explore global markets, and leverage technology positions it for near-term growth. As the industry continues to evolve, it presents exciting opportunities for entrepreneurs, investors and consumers alike, making it a crucial driver of economic and cultural vitality in the United States.
The beverage industry has mainly been thriving on innovation and diversity. From traditional carbonated drinks to a surge in functional beverages and plant-based options, the industry has continually evolved to cater to the changing consumer needs. This adaptability fosters an environment, wherein players with innovative ideas can enter the market, contributing to a dynamic and competitive landscape.
Apart from innovation, players have been keen on advancements in technology and growth of e-commerce platforms, which have transformed the way consumers access and purchase beverages. Online platforms and direct-to-consumer models allow beverage companies to reach a wider audience, experiment with new distribution channels, and gather valuable consumer data for targeted marketing strategies. This has been crucial in boosting the top lines of industry participants.
With an increased focus on health and wellness, consumers are seeking beverages that align with their dietary preferences and lifestyles. Notably, consumers have been steering clear of sodas and drinks with a high alcohol content to stay healthy. Players in the beverage industry have responded to this trend by introducing a variety of health-focused options, such as low-sugar, organic and functional drinks. The incorporation of natural ingredients and the reduction of artificial additives have been further contributing to the industry's appeal in a health-conscious market.
Consequently, there has been a significant rise in demand for energy drinks, sports drinks, low-or-no-sugar carbonated drink variants, sparkling water, dairy, iced tea, juices and ready-to-drink coffee. Also, tequilas, hard seltzers and ready-to-drink cocktails have been gaining popularity, with the increased preference for drinks with low alcoholic content.
In a nutshell, these endeavors and the strong fundamentals place beverage companies well for continued growth in 2024. This makes the industry attractive for investment in the New Year.
4 More Stocks With Winning Streak
Apart from PepsiCo, we have identified four beverage stocks that have delivered earnings surprises in the trailing four quarters. These companies also have a Zacks Rank #1 (Strong Buy) or #2. Moreover, sales and earnings estimates of these companies suggest continued growth in 2024.
Fomento Economico Mexicano (FMX - Free Report) : Fomento Economico Mexicano, alias FEMSA, is witnessing robust trends from growth across all business units, owing to effective growth strategies and strong market demand. The company is also well-placed for growth through investments in digital and technology-driven initiatives, and continued strength in OXXO Mexico and OXXO Gas. FMX’s solid growth prospects, driven by its strategy of creating a distribution platform in the United States, bode well.
FEMSA has been gaining pace in the digital space through its tech and innovation business unit — Digital@FEMSA. The company is focused on building a value-added digital and financial ecosystem for end customers and businesses. Its strategy of creating a national distribution platform in the United States through the expansion of its footprint in the specialized distribution industry bodes well. The Zacks Consensus Estimate for FMX’s 2024 sales indicates a year-over-year rise of 8.6%. The company delivered an earnings surprise of 23.2%, on average, in the trailing four quarters. FEMSA currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Fomento Economico Mexicano S.A.B. de C.V. Price, Consensus and EPS Surprise
Fomento Economico Mexicano S.A.B. de C.V. price-consensus-eps-surprise-chart | Fomento Economico Mexicano S.A.B. de C.V. Quote
Molson Coors Beverage Company (TAP - Free Report) retains its market position, thanks to contributions from its revitalization plan, commitment toward innovation and the premiumization of its global portfolio. A strong portfolio performance, strength in both business units, and the continued momentum in Coors Light and Miller Lite in the United States have been aiding TAP’s performance. Additionally, the company has been focused on expanding into adjacent categories through its Beyond Beer approach. The strategy involves looking beyond its core beer portfolio to build powerful brands in fast-growing categories, without hampering the support for its existing large brands.
TAP’s aspiration to become a total beverage company positions it to draw consumer interest when they are looking for alternatives. This has been the key reason for the success of the Beyond Beer approach. The Zacks Rank #1 company delivered an earnings surprise of 41.3%, on average, in the trailing four quarters. The Zacks Consensus Estimate for its 2024 sales and earnings indicates increases of 0.5% and 2.6%, respectively, from the year-ago period’s reported levels.
Molson Coors Beverage Company Price, Consensus and EPS Surprise
Molson Coors Beverage Company price-consensus-eps-surprise-chart | Molson Coors Beverage Company Quote
The Coca-Cola Company (KO - Free Report) : The soft drink behemoth is poised for long-term growth on its efforts to streamline its portfolio and accelerate investments to expand its digital presence. It has been witnessing a splurge in e-commerce, with the growth rate of the channel doubling in many countries. It is strengthening consumer connections and piloting numerous digital-enabled initiatives through fulfillment methods to capture the online demand for at-home consumption.
Coca-Cola is diversifying its portfolio to tap into the rapidly growing RTD category. The company has been gaining from elasticity in the marketplace, improved price/mix and concentrate sales, and underlying share gains in at-home and away-from-home channels. The Zacks Consensus Estimate for KO’s 2024 sales and earnings suggests growth of 3.2% and 4.6%, respectively. The Zacks Rank #2 company delivered an earnings surprise of 5.1%, on average, in the trailing four quarters.
CocaCola Company (The) Price, Consensus and EPS Surprise
CocaCola Company (The) price-consensus-eps-surprise-chart | CocaCola Company (The) Quote
The Duckhorn Portfolio (NAPA - Free Report) : Formerly known as Mallard Intermediate, Inc., the company produces and sells wines in North America. Duckhorn’s brand equity, diversified omni-channel platform and highly flexible supply chain position it to capitalize on the heightened interest and demand for high-quality wine. These have been aiding NAPA’s sales and volume growth.
The Saint Helena, CA-based company sells wines to distributors. NAPA also sells the same directly to retail accounts and consumers. The Zacks Consensus Estimate for Duckhorn’s fiscal 2024 sales and earnings suggests growth of 12.4% and 8.5%, respectively, from the year-ago period’s reported figures. The Zacks Rank #2 company delivered an earnings surprise of 13.7%, on average, in the trailing four quarters.
The Duckhorn Portfolio, Inc. Price, Consensus and EPS Surprise
The Duckhorn Portfolio, Inc. price-consensus-eps-surprise-chart | The Duckhorn Portfolio, Inc. Quote