PepsiCo, Inc (NASDAQ: PEP) shares have weakened from their record highs above $159, registered in August 2021, and the current price stands at $151. PepsiCo continues to improve its position in the market, and Morgan Stanley increased its price target on PEP shares this trading week.
The outlook for PepsiCo remains positive, according to Morgan Stanley
PepsiCo continues to improve its position in the market, and if you are looking for a solid return potential, shares of this company can be a good choice for long-term investors. The company reported better than expected second-quarter results; total revenue has increased by 20.5% Y/Y to $19.22 billion, which was more than expected, while the GAAP EPS was $1.70 (beats by $0.18).
Morgan Stanley increased its price target on PEP shares this trading week to $172 and announced that the outlook for PepsiCo remains positive. Dara Mohsenian, an analyst from Morgan Stanley, added:
“We expect another PEP EPS beat in Q3, and another quarter of strong organic sales growth confirming higher LT topline growth after Pepsi’s reinvestment in marketing/cap-ex in recent years. Valuation still looks compelling with Pepsi at only a ~3% CY23 EV/EBITDA premium to lower growth food peers.”
The momentum the company achieved during the last several months reflects improved market conditions, combined with adding market share, including taking away customers from its biggest competitor, Coca-Cola. PepsiCo expects to deliver 6% organic revenue growth for the 2021 fiscal year and EPS of $6.20 vs. a consensus of $6.09.
J.P.Morgan sees potential risks for the upcoming quarters mainly due to inflation and covid concerns, but the company’s management announced that PepsiCo is well prepared for unexpected conditions. PepsiCo and Beyond Meat recently announced a partnership to release their
