On Tuesday, PepsiCo Inc
Adjusted EPS of $1.61 beat the consensus estimate of $1.52.
Below are comments from analysts, along with current ratings and price targets.
BofA Securities - Reiterates Buy, $210 price target
Analyst Bryan D. Spillane said the 5% year-on-year increase in pricing helped drive 40 basis points of gross margin expansion to 55.7%.
Organic sales growth of +2.7% was in line with the analyst's +2.6% estimate.
Softer volume by -100bps each in PBNA and Latam was offset by better volume in QFNA, AMESA, and APAC, with FLNA and Europe volumes in line, opined the analyst.
The analyst noted that first-quarter is PEP's smallest, accounting for only 20% of full-year revenue. The price target reflects a P/E multiple of approximately 24x CY25 EPS estimate.
The analyst noted that PEP's premium to nonalcoholic beverage peer average of 23x is warranted by its strengthened position and pricing power to manage the ongoing inflationary environment.
Goldman Sachs - Reiterates Buy, $200 price target
Analyst Bonnie Herzog said PEP reported stronger-than-expected topline growth and sequential volume improvement despite ongoing headwinds from the QFNA recall.
Healthy organic topline growth helped drive core f/x neutral EPS up 7% to $1.61 and gross margin expansion, said the analyst.
Since investor expectations were lower, today's better-than-feared results could be enough to drive the stock higher, asserted the analyst.
Given the challenging operating environment, the analyst expected the management to maintain its FY24 guidance.
According to the analyst, volume pressures will likely continue to be a concern until trends moderate further, which could weigh on the stock in the near term.
The analyst noted PEP remains very well positioned given its strong brand portfolio and long-term growth opportunities in Beverages, given its revenue growth management capabilities.
Price Action: PEP shares are trading lower by 2.36% at $172.30 at the last check Tuesday.
