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Goldman Sachs First Take on Pepsico (PEP) Q4 2023 Earnings: 'we think the stock will likely underperform today'

February 9, 2024 8:33 AM

Goldman Sachs analyst Bonnie Herzog reiterated a Buy rating and $200.00 price target on Pepsico (NASDAQ: PEP).

The analyst comments "Our View - PEP reported mixed Q4 results, with slightly softer topline growth that was more than offset by healthy gross margin expansion, leading to a modest EPS beat. Given mgmt's expectations for category growth rates to moderate and less net revenue realization as inflationary pressures moderate, mgmt walked back their initial FY24 guidance, as we expected, and now expect top/bottom line growth of at least 4%/8% (vs the company's l.t. algo of +4-6%/+HSD%). While optically a bit concerning, we believe this will be welcomed as the market believes this is more doable/realistic. Overall, expectations were low heading into the Q4 print, as investors were fearing the worst. We think these results will likely serve as a reset of expectations this year, which we think will be broadly welcomed. Having said that, we think the stock will likely underperform today especially given the weak volume results (-4%), but believe it could provide a nice entry point for long term investors."

For an analyst ratings summary and ratings history on Pepsico click here. For more ratings news on Pepsico click here.

Shares of Pepsico closed at $173.85 yesterday.


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