PepsiCo (PEP) stock is falling Tuesday as the snack food and beverage maker's revenue miss offsets an earnings beat and another dividend increase.
In the quarter ending December 28, PepsiCo's revenue slipped 0.2% year over year to $27.8 billion. Its earnings per share (EPS) were up 10.1% from the year-ago period to $1.96.
"Our businesses remained resilient in 2024, despite subdued category performance trends in North America, the continued impacts related to a recall in our Quaker Foods North America division and business disruptions due to geopolitical tensions in certain international markets," said PepsiCo CEO Ramon Laguarta in a statement.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Laguarta added that Pepsi's "multiyear productivity initiatives" have allowed the company the ability to invest in its business "and deliver improvements in our gross margin, operating margin expansion and EPS in 2024."
The results were mixed compared with analysts' expectations. Wall Street was anticipating revenue of $27.9 billion and earnings of $1.94 per share, according to CNBC.
For its full fiscal year, PepsiCo said it expects to achieve a low-single-digit increase in organic revenue and a mid-single-digit rise in earnings per share.
"Looking ahead to 2025, we will continue to build upon the successful expansion of our international business, while also taking actions to improve performance in North America," Laguarta said.
PepsiCo also announced a 5% increase to its quarterly dividend, bringing its annual rate to $5.69 per share. This marks the 53rd consecutive annual increase to PEP's dividend, making it one of the best dividend stocks to buy for dependable dividend growth.
Is PepsiCo stock a buy, sell or hold?
PepsiCo has struggled on the price charts over the past 12 months, down 9% on a total return basis (price change plus dividends) vs the S&P 500's 22% gain. Yet Wall Street is bullish on the consumer staples stock.
According to S&P Global Market Intelligence, the average analyst target price for PEP stock is $172.62, representing implied upside of roughly 17% from current levels. Additionally, the consensus recommendation is Buy.
CFRA Research analyst Garrett Nelson is one of those with a Buy rating on the blue chip stock, though he lowered his price target after earnings to $175 from $190.
PepsiCo's bottom-line beat was "driven by stronger-than-expected margins," Nelson says, as both revenue and volume declined over the three-month period. And while PEP's full-year EPS guidance arrives "slightly below the current consensus," Nelson notes that the "company's masterful track record of providing conservative guidance and then exceeding it."
He adds that despite industry headwinds, he still sees value in PEP despite the stock's recent slide.
Related Content
-
Cord Cutting Could Help You Save Over $10,000 in 10 YearsHow cutting the cord can save you money and how those savings can grow over time.
-
The '8-Year Rule of Social Security' — A Retirement RuleThe '8-Year Rule of Social Security' holds that it's best to be like Ike — Eisenhower, that is. The five-star General knew a thing or two about good timing.
-
Cord Cutting Could Help You Save Over $10,000 in 10 Years
How cutting the cord can save you money and how those savings can grow over time.
-
Should I Buy Stocks or Should I Buy Bonds Right Now?Generally speaking, stocks provide reasonable growth while bonds provide stable income. Each play important roles in diversified portfolios.
-
You Were Planning to Retire This Year: Should You Go Ahead?If the economic climate is making you doubt whether you should retire this year, these three questions will help you make up your mind.
-
Are You Owed Money Thanks to the SSFA? You Might Need to Do Something to Get ItThe Social Security Fairness Act removed restrictions on benefits for people with government pensions. If you're one of them, don't leave money on the table. Here's how you can be proactive in claiming what you're due.
-
From Wills to Wishes: An Expert Guide to Your Estate Planning PlaybookConsider supplementing your traditional legal documents with this essential road map to guide your loved ones through the emotional and logistical details that will follow your loss.
-
Why Investing Abroad Could Pay OffCountries overseas are stimulating their economies, and their stocks are compelling bargains.
-
Are These the Next Stocks to Split?Interactive Brokers' recently split its stock to makes its shares more accessible to investors. Could these high-priced stocks be next?
-
Your Home + Your IRA = Your Long-Term Care SolutionIf you're worried that long-term care costs will drain your retirement savings, consider a personalized retirement plan that could solve your problem.
