PepsiCo [NASDAQ: PEP]: It’s earnings season and this week several companies will release their Q2 earnings. One of the most notable ones is PepsiCo. The soft drink giant will be releasing its Q2 results early Tuesday morning. There is a lot of investor optimism around this stock after it posted very strong results in Q1. In the last quarter, the company posted organic revenue growth of about 5.2%, with the strongest growth rate coming from international markets. In fact, its Q1 results were the best the company had reported in the last 3 year. Domestically, growth was mainly driven by its Frito-Lay snack foods unit, which added roughly 23.8% to the company’s revenues in the past year.
This quarter, there is expectation that the stock will continue to perform well. Analysts expect this company to report earnings of $1.50 per share against revenues of $16.43 billion. If it beats these expectations, there is a high probabilty that PEP could rally in the day, and continue its 2019 bullish momentum. It is currently trading at $132.56, from a low of $106.73 in January. This represents some nice gains so far for the year 2019.
Going forward, the company expects full year revenue growth of 4%. These estimates were made when the company announced its Q1 results in April. The company also expects $5 billion in free cash flows, and it has the intention of using them on dividends and buybacks.
At yesterday’s close, PEP was down slightly by 0.35%. It is a correction that saw it cancel most of the gains it had made earlier in the day, when it hit a high of $133.39. If this price action continues in the day, Pepsi could test support at $132.04. However, if strong earnings push PEP through Monday’s highs ($133.39), it would be a signal of strong bullish momentum, and a possibly strong performance in the day.