Yahoo Finance PepsiCo, Inc. (NASDAQ:PEP) Second-Quarter Results Just Came Out: Here's What Analysts Are Forecasting For This Year
PepsiCo, Inc. (NASDAQ:PEP) came out with its quarterly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It was a credible result overall, with revenues of US$23b and statutory earnings per share of US$2.23 both in line with analyst estimates, showing that PepsiCo is executing in line with expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on PepsiCo after the latest results.
See our latest analysis for PepsiCo
Following last week's earnings report, PepsiCo's 20 analysts are forecasting 2024 revenues to be US$93.9b, approximately in line with the last 12 months. Per-share earnings are expected to swell 14% to US$7.92. In the lead-up to this report, the analysts had been modelling revenues of US$94.4b and earnings per share (EPS) of US$7.86 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The analysts reconfirmed their price target of US$182, showing that the business is executing well and in line with expectations. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on PepsiCo, with the most bullish analyst valuing it at US$200 and the most bearish at US$151 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that PepsiCo's revenue growth is expected to slow, with the forecast 4.0% annualised growth rate until the end of 2024 being well below the historical 8.0% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.7% annually. So it's pretty clear that, while PepsiCo's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at US$182, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for PepsiCo going out to 2026, and you can see them free on our platform here.
Before you take the next step you should know about the 3 warning signs for PepsiCo that we have uncovered.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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