Citi Analysts Upgrade Rating and Increase Price Target
Citi analysts have upgraded PepsiCo from Neutral to Buy, while also raising their price target on the company’s shares to $195 from $180. Despite recent debates surrounding PepsiCo’s performance, the analysts believe that the beverage company is on track to meet its financial forecasts.
A Positive Change in Market Expectations
In its third-quarter financial report, PepsiCo presented optimistic guidance for 2024, which was initially met with skepticism by the market. However, in the fourth quarter, PepsiCo adjusted its organic sales growth target to “at least 4%,” providing a more realistic expectation. This adjustment has reset market expectations and created a favorable opportunity for investors, considering PepsiCo’s history of meeting or exceeding guidance.
Short-Term Volume Pressures and Competition
Analysts anticipate that volumes may face pressure in the first half of the year, with Coca-Cola potentially surpassing PepsiCo’s results. However, they believe that this factor has already been priced into PepsiCo stock. Investors could still benefit if product sales exceed expectations and outperform the competition.
Looking Ahead: Coca-Cola Earnings Report
Coca-Cola’s latest earnings report is scheduled for Tuesday. As of premarket trading, shares of Coca-Cola were up 0.1% to $59.62, while PepsiCo stock experienced a 0.2% increase to $168.05.