PepsiCo Tops Earnings Estimates, Goldman Sachs Lauds ‘Very Strong’ Results
2022.04.26 17:52
PepsiCo (PEP) Tops Earnings Estimates, Goldman Sachs Lauds ‘Very Strong’ Results
PepsiCo (NASDAQ:PEP) issued FY organic revenue forecast that beat analyst estimates, driving the company’s shares up on Tuesday.
PEP reported Q1 core EPS of $1.29, up from $1.21 in the year-ago period and above the analyst estimates of $1.23 per share. The company generated $16.20 billion in net revenue, up 9.3% YoY and topping the consensus estimates of $15.57 billion.
Organic revenue grew 13.7% in the period, while analysts were expecting a growth of 9.68%. The company reported organic revenue growth of 13% for PepsiCo Beverages NA, topping the estimated growth of 10.2%.
The snack and beverage company now expects FY organic revenue growth of 8%, compared to the previous forecast of 6%. PEP also expects total cash returns to shareholders of approximately $7.7 billion and continues to see FY core constant currency EPS growth of 8%.
The company took an impairment charge of $241 million after taxes following Russia’s invasion of Ukraine.
“In connection with the deadly conflict in Ukraine, we recognized charges related to property, plant and equipment impairment, allowance for expected credit losses, inventory write-downs and other costs,” the company said.
Goldman Sachs analyst Bonnie Herzog lauded “very strong” results.
“PEP reported a very strong start to the year with Q1 results that delivered an impressive beat on both the top and bottom lines… We believe the stock will react favorably to these strong Q1 results and better-than-expected outlook today. Given PEP’s strong brand portfolio (esp. Frito Lay) and long-term growth opportunities in Beverages, we reiterate our Buy (on CL) rating on the stock.”
Bernstein analyst Callum Elliott is much more bearish on PEP stock as he reiterated an Underperform rating and a $145.00 per share price target.
The analyst noted that a “slight cut to 2022 EPS forecast likely ‘somewhat’ dampens enthusiasm for ‘solid’ 1Q results,” Elliott wrote in a note.
By Senad Karaahmetovic
