Wall Street Favors Coca-Cola Over PepsiCo Ahead of Earnings

Yahoo Finance··US·Read original
3▲1 ▼1Impact / 5
Summary · why it matters

Wall Street has decisively chosen Coca-Cola over PepsiCo as the beverage giant expected to win the year financially, with Coca-Cola shares up 22% this year as the eighth best performer on the Dow while PepsiCo shares have fallen 13%. Yahoo Finance Executive Editor Brian Sozzi said PepsiCo's earnings report on Thursday is critical, as the company has promised strong snack results from price cuts, aggressive cost reductions showing up in profits, and a better second half compared with a weak first half. Sozzi said he doubts PepsiCo will deliver on its top-line promises because of pressure on the snacks business and market share losses in beverages to Coca-Cola, where Diet Coke sales rose 7% and Coke Zero rose 16% in the most recent quarter. He cited GLP-1 weight-loss drugs weighing on snacking, slow growth at Quaker Oats, competition from next-generation brands like OLIPOP, and price increases on Lays potato chips and other snacks that may not have been dialed back enough. Sozzi also noted that PepsiCo management has been unwilling to explore a breakup despite activist pressure, and that several Wall Street shops have cut their estimates into the results, with sentiment further hurt by inflation commentary from General Mills and McCormick.

Impact on assets 5

Consumer Staples± Mixed · 5 stocks
PepsiCo Inc
PEP
▼ NegativeCompetitionrelevance

PepsiCo is losing beverage market share to Coca-Cola and faces pressure on its snacks business ahead of a critical earnings report.

The Coca-Cola Company
KO
▲ PositiveCompetitionrelevance

Coca-Cola is winning market share in beverages from PepsiCo, with Diet Coke sales up 7% and Coke Zero up 16% in the most recent quarter.

Off-coverage companies 1

OlipopPrivate± Mixed
relevance

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