PepsiCo (PEP) Stock Continues to Gain on Q2 Results

PepsiCo (PEP) stock is advancing Thursday afternoon after its second quarter results surpassed analysts' expectations.
By Kaya Yurieff ,

NEW YORK (TheStreet) -- Shares of PepsiCo (PEP) - Get Report are rising 1.63% to $107.67 on heavy trading volume Thursday afternoon after the food and beverage company posted better-than-expected results for the 2016 second quarter.

Before today's market open, the Purchase, NY-based company reported adjusted earnings of $1.35 per share, topping analysts' expectations of $1.29 per share.

Revenue was $15.4 billion for the period, slightly above analysts' estimates of $15.36 billion.

"In what continues to be an incredibly volatile global macro environment, we are pleased with our results for the second quarter," CEO Indra Nooyi said in a statement.

Additionally, PepsiCo now sees 2016 earnings per share of $4.71 per share, higher than its previous guidance of $4.66 per share. Analysts are modeling earnings of $4.73 per share.

This is the third consecutive July that the company has raised its earnings per share outlook.

The increased view comes amid fears that the global economy may contract amid a slowdown in China, recession in major markets such as Brazil and Russia and increased uncertainty surrounding Brexit, the Wall Street Journal noted.

"We tend to start the year with a fairly conservative posture with concern that things could get worse. The fact we've seen no change actually has given us more confidence,'' CFO Hugh Johnston said, according to the Journal.

The company's portfolio includes Frito-Lay, Gatorade, Pepsi-Cola, Quaker and Tropicana.

About 5.73 million of PepsiCo's shares changed hands so far today vs. its average volume of 4.45 million shares per day.

(PepsiCo is held in Jim Cramer's charitable trust Action Alerts PLUS. See all of his holding with a free trial here.)

Separately, TheStreet Ratings Team has a "Buy" rating with a score of B on the stock.

The company's strengths can be seen in multiple areas, such as its notable return on equity, expanding profit margins and solid stock price performance. 

Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

You can view the full analysis from the report here: PEP

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