Key takeaways:
Current price: $131 Price target: $139
Position size: 2.40% 1-year performance: +23%
Pepsi reported +4.5% of organic revenue growth (+2.2% revenue growth), thanks to strong performance from Frito-Lay. Contrary to last quarter, PEP had broad-based revenue growth in all geographies and divisions. Continued growth has been boosted by recent investments in the brands, which the CFO sees as sustainable in the long term. The management team did not increase its 2019 guidance as commodity inflation remains a risk and investments spending is being made in its manufacturing and supply-chain footprint. Its recent drink bubly (introduced last year) is doing well, reaching almost $300M in sales with 11% market share, that is projected by Pepsi to become a $1B in sales in the future. Pepsi and Mountain Dew are turning around after a tougher 2018.The stock has been strong year-to-date so we are not surprised to see it not move higher on solid, but expected results today. Continue reading “Pepsi 2Q19 earnings summary”