PepsiCo, Acuity brands and Constellation brands in focus

Tuesday (October 5)

IN THE SPOTLIGHT: PEPSICO

Harrison, New York-based global food and beverage leader PepsiCo is expected to post third-quarter earnings per share of $ 1.72, representing about 4% year-over-year growth. other, compared to $ 1.66 per share in the same quarter of the year. since.

The American multinational food, snack and beverage company is said to post revenue growth of around 7% to $ 19.3 billion. Over the past four consecutive quarters, on average, the company which owns about 32% of the U.S. soft drink industry’s share has achieved a surprise profit of more than 8%.

“We expect further EPS from PepsiCo (PEP) in the third quarter and another quarter of strong organic sales growth confirming higher LT revenue growth after Pepsi’s reinvestment in marketing / cap-ex these last years. The valuation still looks compelling with Pepsi with an EV / EBITDA premium of just around 3% on CY23 compared to its lower growth food peers, ”noted Dara Mohsenian, equity analyst at Morgan Stanley.

“We are increasingly confident in a sustained recovery in PepsiCo’s long-term organic sales growth (PEP), driven by favorable strategic changes under the leadership of a relatively new CEO (Ramon Laguarta), including a greater reinvestment in the business in marketing / cap-ex, PEP mix moves to the higher growth / higher margin snack category (accounting for around 2/3 of PEP profits), as well as the ‘Beverage revenue trends improved after COVID, driven by category rebound and PEP market share performance improvement sequentially. As shown below, the average 2-year organic PEP sales growth accelerated during Laguarta’s tenure from 3% in 2017 and 2018 before his arrival to 4.1% in 2019 and 4.4% in 2020 after the strategy changes, then to 5.8% in the first half of 2021.. “

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Wednesday (October 6)

IN THE SPOTLIGHT: CONSTELLATION BRANDS, ACUITY BRANDS

CONSTELLATION BRANDS: New York-based international liquor company Fortune 500 is expected to post second-quarter tax profit of $ 2.78 per share, representing about 1% year-over-year growth, up from 2 , $ 76 per share in the same quarter of the year. since. The corona beer marker revenue is expected to increase nearly 4% to around $ 2.34 billion.

“We assess the overweight of the Constellation brands (STZ). To our mind, the valuation does not reflect STZ’s strong LT revenue growth outlook, with the beer segment returning to HSD% depletion growth in FY22 and beyond, a improved outlook for wines and spirits after the low-end sale and a return to share buybacks, ”noted Dara Mohsenian, equity analyst at Morgan Stanley.

ACUITY BRANDS: The lighting and building management company is expected to report fourth-quarter earnings of $ 2.88 per share, representing year-over-year growth of more than 22%, from $ 2.35 per share. share at the same time a year ago.

The Atlanta, Ga.-Based company is reportedly showing year-over-year revenue growth of nearly 10% to around $ 975 million.

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