Pepsico, Inc. (NYSE:PEP) may be poised to beat estimates this earnings season. PEP stock has earnings coming up pretty soon, and events are shaping up quite nicely for their report.
That is because Pepsico is seeing favorable earnings estimate revision activity as of late, which is generally a precursor to an earnings beat. After all, analysts raising estimates for PEP stock right before earnings — with the most up-to-date information possible — is a pretty good indicator of some favorable trends underneath the surface for Pepsico stock in this report.
In fact, the Most Accurate Estimate for the current quarter is currently at $1.41 per share for PEP, compared to a broader Zacks Consensus Estimate of $1.40 per share. This suggests that analysts have very recently bumped up their estimates for PEP, giving the stock a Zacks Earnings ESP of +0.71% heading into earnings season.
So why is this important for PEP stock?
A positive reading for the Zacks Earnings ESP has proven to be very powerful in producing both positive surprises, and outperforming the market. Our recent 10 year backtest shows that stocks that have a positive Earnings ESP and a Zacks Rank #3 (Hold) or better show a positive surprise nearly 70% of the time, and have returned over 28% on average in annual returns (see more Top Earnings ESP stocks here).
Given that PEP stock has a Zacks Rank #3 and an ESP in positive territory, investors might want to consider this stock ahead of earnings. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Clearly, recent earnings estimate revisions suggest that good things are ahead for Pepsico, and that a beat might be in the cards for the upcoming report.