Consumer-staples stocks have gotten hit hard in recent weeks, and PepsiCo hasn’t escaped the carnage. With the steady-Eddie beverage and snack giant set to report earnings on Oct. 10, its stock could be ready to pop.
But earnings could help propel Pepsi’s stock higher. Analysts are looking for sales to grow 6% to $23.4 billion of sales in the third quarter, according to FactSet. Operating margins could rise by about a tenth of a percentage point to 16.4%, helping earnings per share rise an expected 9%, to $2.15. “We expect a slight top & bottom line beat, driven by strong underlying momentum internationally, and healthy demand for Frito-Lay North America and PepsiCo North America as consumer elasticities remain resilient despite the challenging macro environment,” writes Goldman analyst Bonnie Herzog.
“Now [PepsiCo] can be more moderate on pricing and return emphasis to increased volume growth,” says Markus Hansen, a portfolio manager at Vontobel Asset Management, which owns the stock.