Earnings season kicks off again this week with PepsiCo announcing its Q2 earnings on Tuesday July 9. The food and beverage giant beat Wall Street’s expectations in Q1, leading to a rally that saw the company’s stock price hitting all-time highs in April. Since then it has set higher lows and higher highs and looks ready to retest June’s all-time high of $135.
Analysts are expecting EPS of $1.51 with revenues of $16.4 billion. While sugary and diet beverages have been waning in terms of market demand, hitting both PepsiCo and rival Coca-Cola, PepsiCo has a thriving snack business which has been picking up the slack. So much so, that Q1 was the company’s best quarter in three years.
Another thing PepsiCo has going for it is that consumer staples are considered safer stocks than their high-flying tech counterparts. So, in a climate where trade tensions are escalating and there are fears of a coming economic slowdown, PepsiCo shares look like a safer bet. Particularly since the company also pays a respectable dividend of 2.90% and is looking to spend around $3 billion this year on stock buybacks.
Will PepsiCo crack all-time highs once more on Tuesday, or is its price just a reflection of an overheated stock market?
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