- Pepsi reported positive Q2 results before the bell on Thursday.
- Adjusted earnings arrived 13 cents ahead of consensus.
- Revenue came in nearly $600 million above consensus.
- Full-year core EPS guidance was raised to $7.47.
- PEP stock long-term uptrend could provide support.
PepsiCo (PEP) stock initially surged up to $186.62 or 1.6% soon after Thursday's open after the food and soft drink purveyor easily bested Wall Street consensus for the second quarter when it released results during the premarket. A half hour into the session, however, PEP is back down to a more meager gain of 0.3%. It seems like bulls saw this as a good spot for profit-taking. PepsiCo stock had jumped 2.1% in the premarket when results were announced.
PepsiCo reported adjusted earnings per share (EPS) of $2.09 or 13 cents ahead of analyst expectations. Revenue of $22.32 billion rose more than 10% YoY and beat consensus by nearly $600 million.
PepsiCo earnings news: Guidance raised for second half
Volumes fell for both convenient foods and beverages in a number of locales and segments throughout the business, but Pepsi was able to overpower these obstacles through pricing power.
“We are very pleased with our performance for the second quarter as our business momentum remains strong. As a result, we now expect our full-year organic revenue to increase 10 percent (previously 8 percent) and our core constant currency EPS to increase 12 percent (previously 9 percent),” said Chairman and CEO Ramon Laguarta.
Volumes fell 5% and 4.5% on an annual basis at the North American operations of both the Quaker Foods and PepsiCo Beverages, respectively. The Africa, Middle East and South Asia division also performed poorly. On the other hand, European convenient foods and beverages in the Asia/Pacific division both witnessed growth. Europe as a whole saw profits rise 46% YoY, making it the best performing geography by far.
Management reiterated its expectation for $6.7 billion in dividends for 2023 and share repurchases totaling $1 billion. Additionally, full-year guidance for core EPS was raised from $7.27 to $7.47. This would be a 10% gain from 2022’s $6.79.
PepsiCo stock chart
PepsiCo stock has recently turned over bearishly on the Moving Average Convergence Divergence (MACD) indicator, and the 9-day Simple Moving Average (SMA) is trading below the 21-day average. The second-quarter earnings spike may be enough to turn both indicators bullish however.
If PEP stock bulls decide to build on the quarter’s solid beat-and-raise performance, then recent range highs at $188 and $196.88 will be the focus.
PepsiCo stock has been in an incline for most of the time since the March 2020 low of the pandemic. The current bottom trendline provides support near $176.50, which is near enough to make bulls more courageous in entering at the current price level.
PEP stock daily chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD turns negative near 1.0760
The sudden bout of strength in the Greenback sponsored the resurgence of the selling pressure in the risk complex, dragging EUR/USD to the area of daily lows near 1.0760.
GBP/USD comes under pressure and challenges 1.2500
GBP/USD now rapidly loses momentum and gives away initial gains, returning to the 1.2500 region on the back of the strong comeback of the US Dollar.
Gold retreats from highs on stronger Dollar, yields
XAU/USD trims part of its initial advance in response to the jump in the Dollar's buying interest and the re-emergence of the upside pressure in US yields.
XRP tests support at $0.50 as Ripple joins alliance to work on blockchain recovery
XRP trades around $0.5174 early on Friday, wiping out gains from earlier in the week, as Ripple announced it has joined an alliance to support digital asset recovery alongside Hedera and the Algorand Foundation.
Week ahead – US inflation numbers to shake Fed rate cut bets
Fed rate-cut speculators rest hopes on US inflation data. After dovish BoE, pound traders turn to UK job numbers. Will a strong labor market convince the RBA to hike? More Chinese data on tap amid signs of slow Q2 start.