PepsiCo, Inc. (PEP) Impresses with Q3 Results

PepsiCo, Inc. (PEP) Impresses with Q3 Results

By Carly Forster and Sarah Roden

PepsiCo, Inc. (NYSE:PEP) is a Purchase, New York based multinational food and beverage corporation, mostly known for manufacturing carbonated beverages. The company also manufactures and distributes grain-based snack foods, beverages, and other products, such as Lays potato chips and Gatorade. The beverage company released its third quarter report on Thursday, October 9th and its results beat analysts’ expectations.

During its Q3 results, PepsiCo reported $1.36 earnings per share on a Non-GAAP basis, beating analysts’ consensus estimate of $1.29 by $0.07. During the same quarter last year, Pepsi posted $1.24 earnings per share. The company earned revenue of $17.22 billion for the quarter. The snack and beverage company’s profit for the quarter was up 1.8% on a year-over-year basis. On average, analysts expect that Pepsi will post $4.58 earnings per share for the current fiscal year.

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PepsiCo, Inc. (NYSE:PEP)’s outstanding quarter is likely due to its flourishing snack business where sales rose 3% in North America and 6% in Latin America. Chairman and CEO Indra Nooyi said in the report, “We delivered good third quarter results in the face of an ongoing challenged macroeconomic environment driven by increasing volatility in the emerging markets and continued sluggish consumer demand in developed markets.” He continued, “We achieved these results because our brands are strong, our product portfolio is on-trend, our geographic footprint is broad and diverse, and we are executing well in the marketplace.”

Shares of Pepsi opened at $93.66 on Friday, October 10th. The snack and beverage company has a 1-year high of $96.22 and a 1-year low of $77.01. The stock’s daily moving average is $94.78 and it had a 50-day moving average of $92.00. The market cap for Pepsi is $144.34 billion and its P/E ratio is 20.94.

On October 9th, Investor Place blogger Dan Burrows claimed the stock’s valuation was too high and too expensive to Buy. Although he believes PepsiCo, Inc. (NYSE:PEP)is an admirable company, Burrows does not think its stock is worth 19 times forward earnings. Burrows currently has a 63% success rate recommending stocks, earning a +5.6% average return per recommendation.

On the other hand, on October 10th, Motley Fool blogger Tamara Walsh named Pepsi as a “top dividend growth stock to Buy.” Rutter pointed out that Pepsi is planning to buy back $5 billion worth of shares, significantly increasing shareholder value. Rutter currently has a 31% success rate recommending stocks, earning a -5.7% average return.

While one expert is turned off by Pepsi’s high price, the other thinks now is a great buying opportunity. Whose recommendation do you trust?

To see more recommendations for PepsiCo, Inc. (NYSE:PEP), visit TipRanks today!

Carly Forster and Sarah Roden write about stock market news. Carly can be reached at [email protected] and Sarah can be reached at [email protected]

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