PepsiCo Set to Report Q2 Earnings: What to Know

PepsiCo (NASDAQ: PEP) is gearing up to release its Q2 earnings report today before the market opens. Here's a rundown of what investors should keep an eye on as the food and beverage giant unveils its latest results.

Expected Numbers:

Heading into earnings, PepsiCo has an average analyst price target of $183.7, compared to its current share price of $161.8.

In the previous quarter, PepsiCo's revenues hit $18.25 billion, a 2.3% year-on-year increase, matching analysts' expectations. The quarter saw a mix of results: while PepsiCo outpaced estimates for organic revenue growth, it fell short on gross margin expectations.

This quarter, analysts anticipate a 1.3% year-on-year revenue growth, predicting revenues to reach $22.62 billion. This is a slowdown compared to the 10.4% growth seen in the same quarter last year. Adjusted earnings are expected to be $2.16 per share.

Most analysts have reconfirmed their estimates in the last 30 days, indicating confidence in PepsiCo's performance. Notably, PepsiCo has only missed revenue estimates once in the past two years, typically exceeding expectations by 2.3% on average.

Market Conditions & Peer Performance

Looking at peers in the consumer staples sector, there are mixed results.

Constellation Brands (NYSE:STZ) saw a 5.8% year-on-year revenue growth, aligning with analysts' expectations, while McCormick's (NYSE:MKC) revenue remained flat, also meeting estimates. Following their earnings reports, Constellation Brands' stock remained steady, whereas McCormick's stock rose by 4.8%.

The stock market has experienced volatility in 2024, with mixed inflation signals causing uncertainty about rate cuts. Consumer staples stocks, including PepsiCo, have been affected, with an average share price decline of 3.9% over the past month. PepsiCo’s stock is down 2% in the same period.