Market Opportunity - PEPSI

• Pepsico (ticker: PEP) – JULY 13, PREMARKET: Q2 EARNINGS REPORT. PepsiCo, Inc. Common Stock is anticipated to announce its earnings on 07/13/2023 before the market opens. The report will cover the fiscal quarter ending in June 2023. As per Zacks Investment Research and the consensus of seven analysts, the expected EPS forecast for the quarter is $1.95. In comparison, the EPS reported for the corresponding quarter last year was $1.86. These figures provide valuable insights into PepsiCo's earnings performance and serve as a benchmark for evaluating its financial growth. Please note that earnings forecasts are subject to change and should be interpreted with caution.
• PepsiCo has successfully expanded its brand portfolio, extending beyond just soda. The company has established a presence in diverse food and beverage categories. Within its beverage portfolio, PepsiCo offers popular brands such as Pepsi, Mountain Dew, 7UP, Sierra Mist, Tropicana, and Mug Root Beer. Additionally, its energy drinks segment features Gatorade, Propel, Rockstar, Amp, Bang, and Gatorade. In the snack food category, PepsiCo's notable brands include Cheetos, Cracker Jack, Doritos, Fritos, Lay's, Ruffles, Stacy's, Smartfood, Sun Chips, and Tostitos. Moreover, the company's packaged food brands encompass Quaker, Cap'n Crunch, Grandma's, Life, Naked, and Rice-A-Roni. This diversified brand portfolio reflects PepsiCo's strategic approach to cater to a wide range of consumer preferences and capture market opportunities.
• Despite the overall market rally in 2023, PepsiCo's stock has not experienced significant growth and has remained relatively stable since the beginning of the year. This under performance is surprising, considering the company's robust sales and earnings performance in recent quarters. In fact, PepsiCo's management has shown confidence in its business outlook by raising its 2023 outlook in late April. The company's resilience in maintaining demand across its packaged foods portfolio further reinforces its potential for future growth.
• PepsiCo's management raised its earnings outlook, projecting a 9% increase in profits for the year compared to the previous target of 8%. This upgrade underscores the company's pricing power and successful launch of innovative products in niche markets such as sparkling water and energy drinks. Additionally, PepsiCo's efforts in cost reduction are expected to lay the groundwork for a future earnings surge once the next cyclical upturn begins. These strategic moves highlight PepsiCo's proactive approach to driving growth and optimizing profitability.
• While many consumer-focused companies are facing challenges of rising prices and falling volumes, PepsiCo stands out with its remarkably strong growth position. Although the company experienced a 3% decline in sales volumes in its food business, its beverage volumes saw an increase in Q1. Notably, PepsiCo achieved an impressive 14% jump in overall organic sales, building upon significant gains from the previous year. In comparison to other food-related companies like McCormick, which is growing at a rate of approximately 10%, PepsiCo's ability to gain market share in a more difficult selling environment is evident. CEO Ramon Laguarta expressed satisfaction with the company's performance and business momentum during a late April investor meeting. These results further reinforce PepsiCo's strong market position and its ability to navigate challenging market conditions.
• Closing statement: Based on the information provided, there are several reasons to consider trading with PepsiCo stock. First, PepsiCo has successfully expanded its brand portfolio beyond soda, establishing a strong presence in diverse food and beverage categories. This diversified portfolio positions the company to cater to a wide range of consumer preferences and capture market opportunities. Second, despite the stock's underperformance in 2023, PepsiCo has demonstrated robust sales and earnings performance, with management raising its earnings outlook and showcasing confidence in its business outlook. Third, PepsiCo's strong growth position, highlighted by impressive organic sales growth and market share gains, sets it apart from other consumer-focused companies facing challenges. Overall, PepsiCo's strategic approach, resilient demand, and proactive measures for growth make it an appealing investment option.

• Calculations for exchange rate used as of 13:30 (GMT+2) 06/07/2023
• Lot Size: 0.2 lot = 20 shares (1 lot=100 shares)
• This is not a financial advice and all investors should be aware of the fact that they are responsible for any profits or losses.

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