Beverage giant PepsiCo, Inc. (NASDAQ:PEP) is slated to release its third quarter Fiscal 2022 results on October 12, before the market opens. PepsiCo offers a wide range of food, snack, and beverage products worldwide. PEP stock has lost 4.5% so far this year.
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The Street expects PepsiCo to post an adjusted profit of $1.85 per share in Q3, meaningfully higher than its prior-year period’s figure of $1.79 per share. Meanwhile, revenue is pegged at $20.81 billion, representing a year-over-year jump of 3.1%, and 2.9% higher than Q2FY22 revenue of $20.23 billion.
Analysts Expect PepsiCo’s Winning Streak to Continue
Wall Street analysts believe that PepsiCo will continue to outperform expectations as it has in the past. Despite the inflationary environment, PepsiCo’s products enjoy a large market share in the consumer staples sector.
Recently, Wedbush analyst Gerald Pascarelli initiated coverage of PEP stock with a Buy rating and a $185 (14.3% upside potential) price target. The analyst believes that PepsiCo has the largest total addressable market in the food and beverage segments and commands solid pricing power that beats inflation and rising costs of inputs.
Similarly, analyst Andrea Faria Teixeira of J.P. Morgan believes that PepsiCo’s demand momentum will continue as consumers turn to consumables and avoid discretionary products. As per the analyst, PEP stock offers investors “safety/low volatility with compounding earnings,” and remains her top beverage pick.
Having said that, ahead of the Q3 results, Teixeira marginally reduced the price target on PEP to $186 (14.9% upside potential) from $188 and reiterated a Buy rating.
Website Traffic Shows Strong Momentum
As per the TipRanks Website Traffic Tool, the total estimated visits to all of PepsiCo’s food and beverage websites globally grew by 29.45% in September 2022 compared to the same month last year. The growing numbers demonstrate that PepsiCo’s products continue to enjoy tremendous global momentum.
Is PepsiCo a Buy, Sell, or Hold?
Analysts have a Moderate Buy consensus rating on PepsiCo stock. This is based on five Buy versus five Hold ratings on TipRanks. The average PepsiCo price target of $182.20 implies a reasonable 12.6% upside potential to current levels.
Food For Thought
PepsiCo has proven its resilience even in the toughest macroeconomic scenario. Moreover, PepsiCo earns an eight on TipRanks’ Smart Score Rating system, which means that the stock is likely to outperform market averages. Also, the company pays a regular cash quarterly dividend of $1.15 per share, which implies a lucrative yield of 2.75% for dividend-seeking investors.
