Can PepsiCo Stock Gain Momentum from Fiscal 3Q17 Results?



Fiscal 3Q17 results

PepsiCo (PEP) is scheduled to announce its fiscal 3Q17 results on October 4. Fiscal 3Q17 ended on September 9, 2017. The snack food and beverage giant surpassed analysts’ revenue and earnings expectations in the first two quarters of fiscal 2017.

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YTD movement

As of September 27, PepsiCo’s stock has risen 6.2% on a YTD (year-to-date) basis. PepsiCo’s stock has fallen 2.3% since the announcement of its fiscal 2Q17 results in July 2017.

The stocks of nonalcoholic beverage peers Coca-Cola (KO), Dr Pepper Snapple (DPS), and Monster Beverage (MNST) have given returns of 7.7%, -3.3%, and 23.8%, respectively, since the start of the year.

PepsiCo, Coca-Cola, and Dr Pepper Snapple have underperformed the S&P 500 Index, which has risen about 12.0% since the start of 2017. The Consumer Staples Select Sector SPDR Fund (XLP), which has 5.1% exposure to PepsiCo stock, has moved up by 4.5% on a YTD basis.

PepsiCo, Coca-Cola, and Dr Pepper Snapple have been under pressure due to weak soda volumes. The dismal soda volumes are the result of a shift in consumer preference to healthier beverage options. According to trade publication Beverage Digest, the US soda volumes fell 0.8% in 2016. This marked the 12th consecutive year of decline in US soda volumes. PepsiCo is focusing on healthier snack food and beverage options to boost its sales.

Series overview

In this preview series on PepsiCo’s fiscal 3Q17 results, we’ll discuss the analysts’ expectations for the company’s revenue and earnings. We’ll also discuss the company’s margins, volumes, valuation, and analysts’ recommendations for PepsiCo’s stock.  

We’ll start with a discussion of analysts’ expectations for PepsiCo’s 3Q17 revenue in the next part of this series.


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