by Ben Levisohn

Earnings Projection

Earnings are expected to be favorable for PepsiCo. The company is anticipated to report a third-quarter profit of $2.15, an increase from $1.97 during the same period last year. Sales are also predicted to rise to $23.41 billion from $21.97 billion.

Insight from Analyst

Wedbush analyst Gerald Pascarelli foresees slightly lower sales; however, he believes earnings will be satisfactory. Pascarelli points out that PepsiCo has consistently met or exceeded earnings expectations since 2018, with 21 out of the past 22 quarters ending in positive results.

Weight Loss Drugs’ Impact

The main concern lies in the influence of weight loss drugs, which have already caused PepsiCo stock to decline by 9.8% over the past month. However, it’s important to note that the current utilization of Eli Lilly’s Mounjaro and Novo Nordisk’s Ozempic and Wegovy is not yet widespread, therefore their impact on the numbers will likely be minimal.

PepsiCo’s management will play a crucial role in shaping investors’ perception of this potential impact.

Analyst’s Opinion

Analyst Gerald Pascarelli remains unconcerned. He states, “While we acknowledge that it is early days and the situation will remain fluid, the notion that a significant part of the nondiabetic population will pay in excess of $1K per month for this medication on a long-term basis seems unreasonable to us.”

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