PepsiCo Q3 earnings preview: Can momentum continue despite bottom-line headwinds?
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PepsiCo (NASDAQ:PEP) is scheduled to announce Q3 earnings results on Wednesday, October 12th, before market open.
Over the last 3 months, analysts have upgraded EPS estimates 3 times but made 10 downward revisions. Revenue estimates have seen 11 upward revisions and 1 downward revision.
The consensus EPS Estimate is $1.85 (+3.2% Y/Y) and the consensus Revenue Estimate is $20.81B (+3.1% Y/Y).
PepsiCo (PEP) topped Q1 earnings estimates but posted mixed guidance for the full year, with higher than anticipated input cost inflation forecast for the balance of 2022.
Morgan Stanley recently told clients it expects the outperformance to continue, touting the stock as a top pick. Despite the resilient performance, the beverage giant is said to be considering staff reductions. The company also cut operations in Russia in September.
Jefferies also sees another strong quarter up ahead, but will be looking for management updates on PepsiCo's energy drink strategy following its acquisition of a stake in Celsius Holdings (CELH) earlier this year.
PepsiCo (PEP) may also be updating its cost outlook amid a stronger dollar and higher agricultural prices almost across the board.
J.P. Morgan expects momentum to continue as well as consumers reallocate spending from discretionary items and retailers lean into lower-priced categories that could help impulse purchases. However, inflationary cost pressures and foreign currency may remain a headwind to PepsiCo's (PEP) bottom line.
Shares of the soft drink giant are down for 2022 but have held up significantly better than the overall market. Meanwhile, the stock remains in the green over a 12-month period.

Over the last 2 years, PEP has beaten EPS estimates 100% of the time and has beaten revenue estimates 100% of the time.