CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We lower our 12-month target by $10 to $200, based on a 2025 P/E of 22.5x, a discount to its 5-year mean forward P/E of 24.4x. We raise our adjusted EPS estimates by $0.05 to $8.15 for ’24 and by $0.15 to $8.90 for ’25. PEP posts Q4 adjusted EPS of $1.78 vs. $1.67 (+9%), six cents ahead of consensus. The beat was driven by a lower-than-expected tax rate, as net revenue fell 0.5% to $27.85B ($520M short of consensus) as volumes fell across both the Convenient Foods (-3%) and Beverages (-2%) categories. Gross margin expanded 90 bps to 53.0% (20 bps below consensus). PEP introduced full year EPS guidance of approximately $8.15, in line with consensus and implying 7% growth from the $7.62 earned in ’23. PEP also announced a 7% dividend increase to $5.42/sh annualized. We lower our opinion to Buy, reflecting near-term concerns related to slowing earnings growth (’24 growth should be about half the Y/Y rate achieved in ’23) and volumes are likely to remain challenged by consumer pushback to product price increases.