PepsiCo (PEP) Stock Up, Q2 Estimates Raised at Jefferies
NEW YORK (TheStreet) -- Shares of PepsiCo (PEP) - Get Report are up 0.18% to $105.82 in early morning trading as current quarter estimates were raised earlier today to $1.29 from $1.27 at Jefferies.
The firm maintains a "buy" rating with a price target of $119 on the Purchase, NY-based beverage and food company.
This upgrade comes ahead of Pepsi's second quarter results expected Thursday before the market open. Jefferies is estimating 3.5% org sales growth for Pepsi, saying the stock "looks attractive with bevs biz at implied 10.5x EV/EBITDA vs. 14.5x group avg."
Analysts predict quarterly per-share earnings of $1.29, down from $1.32 in the year-earlier quarter, and a 3.4% drop in revenue to $15.37 billion, according to a Thomson Reuters survey.
Pepsi CEO Indra Nooyi said there was "sustained volatility and uncertainty" and that the global environment was "difficult" in April's earnings call, but the company declined to comment about the upcoming announcement, according to theWall Street Journal.
Additionally, Pepsi announced early last week that it would put the artificial sweetener aspartame back in its Diet Pepsi formula after taking it out last August. Sales of the drink fell 5.8% in 2015 and nearly 11% in the first quarter of 2016, Bloomberg reports.
Separately, 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. TheStreet Ratings has this to say about the recommendation:
We rate PEPSICO INC as a Buy with a ratings score of B. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. 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. We feel its strengths outweigh the fact that the company shows weak operating cash flow.
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