Thirsty for More
Shares of the global soda and snacks' supplier initially slid by 1.2% in the pre-market trading on Tuesday, as the most immediate response to the giant's Q3 earnings report. Mixed numbers included a negligible gain of $0.02 compared to the average estimate of $2.29 for the company's profit per share, while total sales for the quarter came out at nearly 2.4%, or $0.58 billion lower vs consensus expectations of $23.90 billion. Subdued category performance trends in North America like continued impacts related to certain recalls at Quaker Foods and business disruptions "due to rising geopolitical tensions in certain international markets" were cited.
It actually meant a penny-size decline within 0.5% YoY, but a 3.6% surplus QoQ in PepsiCo's revenue which kept this gross output measure in the upward trending flow to emphasize the stable demand for the company's product lineups. The company's own guidance for the rest of 2024 is sweet enough to see its annual equity per share (EPS) at $8.15, in line with consensus number of $8.14, for at least 8% core constant currency growth, with a "low-single-digit increase" for its full-year organic revenue outlook, after the company's previously more precise forecast of approximately 4%. Meanwhile, the quarterly profit indications reached a new record. Counterpointing slower rise in revenue, thanks to tightly managing costs, this puts a nest egg for the higher valuation of PepsiCo by stock investors in the future, if most of the crowd are feeling rather reluctant to buy it at the particular moment.
As a result, no damage to PepsiCo's market cap remained at the time when the opening bell for a regular session started ringing on Wall Street. And the price even added 0.75% half an hour later. The same screenplay we had already described three months ago, and which has been once implemented for PepsiCo after July 11's previous quarterly release, is now poised to repeat. Its share price dipped below $160 on that day and then climbed to above $180.
The only two visible differences, which may postpone similar effects during the next couple of months, are now on charts. The first limit for immediate price growth is a recent double retest of a $180 resistance line in September. Another one is some higher range for PepsiCo quotes, between $165 and $168.50 in the last few days, vs its $160+ levels in early July before the launch of its previous ascending cycle. Thus, another check out of the lower area between $160 and $165 cannot be ruled out before the bulls would be properly involved in their job. They could be ready to wait a little more or may be too lazy to rise up now, yet most of PepsiCo investors are still thirsty for more. A range from $195 to $200 may be considered as the next target area in case of a possible move above $180.
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