PepsiCo, Inc. (NASDAQ:PEP) shares are bubbling as bold new drinks and a turbocharged productivity playbook promise more fizz across its shelves.
The company reported third-quarter adjusted earnings per share of $2.29, beating the analyst consensus estimate of $2.26.
Quarterly sales of $23.937 billion (+2.6% year over year) outpaced the Street’s expectation of $23.827 billion.
Goldman Sachs analyst Bonnie Herzog reiterated a Buy rating and price forecast of $165.
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Herzog said expectations were modest heading into the company’s third quarter, citing ongoing worries about consumer health and softer consumption trends reflected in recent scanner data for PFNA and PBNA. The analyst added that she expects an inflection next quarter as PepsiCo rolls out a robust innovation pipeline (including new protein beverages), sharpens its price-pack architecture to deliver value, and rightsizes its cost base.
Herzog said the company is well-positioned thanks to strong brands and long-term growth in food and beverages.
The analyst cited a solid innovation pipeline, disciplined revenue growth management, an owned distribution network, and a superior supply chain that keeps the right, affordable products available when and where needed.
Despite near-term headwinds, Herzog expects sustainable mid-single-digit average organic sales growth over the next decade.
Herzog said she is encouraged by management’s efforts to elevate and speed up productivity initiatives, along with disciplined commercial investments, which she believes should help stimulate growth going forward.
PEP Price Action: PepsiCo shares were up 3.57% at $143.79 at the time of publication on Thursday, according to Benzinga Pro data.
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