Nonalcoholic Beverage Stocks: Gauging Analysts’ Ratings
As of June 13, 16 out of 26 (61%) of the analysts covering Coca-Cola (KO) stock gave it a “hold” rating. Nine analysts have a “buy” rating.
Weak sales and volume growth is making nonalcoholic beverage companies like Coca-Cola, PepsiCo, and Dr Pepper Snapple focus on improving their margins.
As of June 13, Coca-Cola, PepsiCo, and Dr Pepper Snapple were trading at 12-month forward PE ratios of 23.8x, 22.4x, and 20.0x, respectively.
Coca-Cola (KO) and PepsiCo (PEP) continue to expand their portfolio of better products through innovation and also via strategic acquisitions.
In 1Q17, Coca-Cola’s (KO) revenue fell 11.3% to $9.1 billion. This was the eighth consecutive quarter of revenue decline for the soda giant.
Beverage giants Coca-Cola (KO) and PepsiCo (PEP) have delivered better total returns than the S&P 500 Index on a YTD (year-to-date) basis.
Monster Beverage’s (MNST) gross margin expanded to 64.8% in 1Q17 from 62.2% in 1Q16. This gross margin expansion was the result of raw material cost savings.
On May 5, 2017, Monster Beverage (MNST) was trading at a 12-month forward PE (price-to-earnings multiple) of 31.1x, up 3.7% in reaction to its 1Q17 results.
Monster Beverage’s adjusted earnings per share rose 18.5% to $0.32 in 1Q17. The company’s strong double-digit earnings growth helped it to fall in line with analysts’ consensus estimate.
Leading energy drink maker Monster Beverage’s (MNST) net sales rose 9.1% on a year-over-year basis to $742.1 million in 1Q17.
Monster Beverage stock rose 3.3% on May 5, 2017, in reaction to the release of its 1Q17 results on May 4. The stock continued its upward momentum on May 8.
As of May 1, DPS was trading at a 12-month forward PE ratio of 19.6x. The multiple fell 4.3% on April 26, the day DPS announced its 1Q17 results.
In 1Q17, DPS’s gross margin expanded by 30 basis points to 59.8%. The 1Q17 gross margin was positively impacted by favorable mark-to-market activity.
As of May 1, 2017, Dr Pepper Snapple’s (DPS) stock was trading at $90.88, which was 0.2% higher on a YTD (year-to-date) basis.
In 1Q17, Dr Pepper Snapple delivered EPS of $1.01, excluding the impact of one-time items, surpassing the consensus Wall Street analyst estimate of $0.97.
Dr Pepper Snapple (DPS) generated sales of $1.51 billion in 1Q17, missing the consensus Wall Street analysts’ sales estimate of $1.55 billion.
As of April 26, 2017, PepsiCo (PEP) was rated a “buy” by 16 of the 22 analysts, or 73.0%, covering the stock.
PepsiCo’s (PEP) gross margin fell 45 basis points to 56.1% in fiscal 1Q17 due to commodity inflation.
PepsiCo’s (PEP) 12-month forward PE (price-to-earnings) multiple fell 2.4% to 21.7x on April 26, 2017, following the company’s 1Q17 results.
PepsiCo’s business in developed markets generated organic revenue growth of 1.0%, mainly due to its Frito-Lay North America and North American Beverages segments.