Robert Moskow has given his Buy rating due to a combination of factors surrounding PepsiCo’s current position and future prospects. Despite a top-line miss in Q4 and a reduced sales growth forecast for 2024, Moskow’s confidence in PepsiCo’s stock is underpinned by the company’s strong brand portfolio, strategic packaging options, and value to retailers. Additionally, he notes favorable foreign exchange impacts and a fourth-quarter earnings beat, leading to an increased EPS forecast for 2024.
Moskow’s analysis also highlights Frito-Lay’s solid business performance and pricing strategy, which do not seem to be adversely affected by competitive pressures or shifts in consumer purchasing behavior towards smaller pack sizes. Furthermore, he is optimistic about PepsiCo’s beverage portfolio shifts towards higher growth areas and a continued improvement in operating margins, despite the slow top-line growth in Pepsi Beverages North America. The valuation adjustment to a $200 target price reflects a balance between near-term caution and long-term growth expectations, justifying the premium multiple consistent with historical averages.
In another report released today, Wedbush also maintained a Buy rating on the stock with a $195.00 price target.
Based on the recent corporate insider activity of 55 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of PEP in relation to earlier this year.
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PepsiCo (PEP) Company Description:
PepsiCo, Inc. is a food and beverage company that owns brands like Frito-Lay, Gatorade, Pepsi-Cola, Quaker, Cheetos, Doritos, Aquafina and Tropicana. The company was founded by Donald M. Kendall, Sr. and Herman W. Lay in 1965 and is headquartered in Purchase, NY.
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