PepsiCo shares fall for a third straight session on Tuesday, quarterly results top estimates as demand for sodas, chips supports

July 10, 2019 9:38 am

PepsiCo Inc’s second-quarter revenue and earnings, reported on Tuesday, exceeded Wall Street estimates, supported by robust demand for the company’s sodas, Lays chips and sparkling waters.

PepsiCo shares closed lower for a third consecutive trading session on NASDAQ on Tuesday. It has also been the steepest daily loss since July 5th. The stock went down 0.62% ($0.82) to $131.74, after touching an intraday low at $130.69, or a price level not seen since June 6th ($130.56).

Shares of PepsiCo Inc have risen 19.24% so far in 2019 compared with an 18.86% gain for the benchmark index, S&P 500 (SPX).

In 2018, PepsiCo’s stock went down 7.87%, thus, it underperformed the S&P 500, which registered a 6.24% loss.

The company said its net revenue had surged 2.2% year-on-year to $16.45 billion during the second quarter ended on June 15th. In comparison, the median analyst estimate had pointed to revenue of $16.43 billion.

Revenue at Frito-Lay North America, PepsiCo’s snacking unit, went up 4.5% year-on-year, while revenue at its beverage division grew 2.5% during the quarter from a year ago.

Meanwhile, net income attributable to shareholders was reported to have increased to $2.04 billion ($1.44 per share) during the quarter ended on June 15th from $1.82 billion ($1.28 per share) in the same period a year ago.

PepsiCo’s earnings per share, which exclude special items, were reported at $1.54 during the latest quarter. That figure compares with adjusted earnings of $1.50 per share, expected by analysts.

Analyst stock price forecast and recommendation

According to CNN Money, the 19 analysts, offering 12-month forecasts regarding PepsiCo Inc’s stock price, have a median target of $131.00, with a high estimate of $148.00 and a low estimate of $106.00. The median estimate represents a 0.56% downside compared to the closing price of $131.74 on July 9th.

The same media also reported that at least 14 out of 23 surveyed investment analysts had rated PepsiCo Inc’s stock as “Hold”, while 7 – as “Buy”. On the other hand, 1 analyst had recommended selling the stock.

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