Pepsico's (PEP.US) results topped analysts' expectations for the third consecutive quarter. Along with the successful results, the company raised its annual forecast. Shares gained 2% before the open:
Revenue: $21.97 bln vs. $20.84 bln forecasts
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appEarnings per share (EPS): $1.97 vs. $1.84 forecasts
- Pepsico raised its forecast for annual revenue growth and earnings per share by 2% to 12 and 10%, respectively. Annual earnings per share (EPS) is forecast to be $6.73;
- Consumers are shifting their spending away from durable goods where analysts expect a bigger slowdown to consumer goods, benefiting the company's stock. This phenomenon was also previously reported by Wal Mart (WMT.US), through which JP Morgan analysts expected Pepsico's performance to improve. The report also showed that the condition of American consumers remains healthy;
- The company's Frito-Lay North America and Quaker Food North America snacks division registered growth of 20% and 15%, respectively, despite a decline in total product sales. The good results show that Pepsico has successfully passed on costs to customers, the price increase reflected the company's declining total purchase volume. At the same time, the company registered 4% higher demand for PepsiCo Beverages products;
- The company said production costs continued to rise in the second half of the year and it intends to focus on reducing them by, among other things, using smaller package sizes.
Shares of Coca Cola (KO.US) are also gaining on the wave of Pepsi's strong performance; the company will present financial results a little later on October 25.
Pepsico (PEP.US) shares, D1 interval. The company's shares have fallen below the 200 SMA (red line) three times since the beginning of the year, and each time rebounded above it after surprisingly good results. A similar situation may also occur this time, the company shows resilience, demand for Pepsi's flagship products remains strong despite high inflation. Bulls can elevator the price above the 50 and 200 session averages, the stock has a chance to get back above $170 per share. Statistically, companies with an established global presence and brand name like Pepsico and CocaCola should fare better in a recessionary environment, making them a 'safe haven' for investors in the context of an economic slowdown. Source: xStation5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
