PepsiCo's shares are experiencing a surge in value.
In a significant turn of events, PepsiCo's shares soared around four percent in pre-market trading following the release of its impressive second-quarter results. This performance has placed both PepsiCo and its rival, Coca-Cola, on the watchlist of investors, with anticipation building for the upcoming quarterly results of the latter.
PepsiCo's encouraging performance, however, may not be the only factor influencing investor sentiment. Coca-Cola, with its robust global strength, resilient brand portfolio, and the tailwind of major shareholder Warren Buffett, continues to enjoy strong analyst support.
Analysts predict a year-over-year decline in Coca-Cola's earnings despite higher revenues. For the quarter ended June 2025, Coca-Cola is expected to report earnings per share (EPS) of $0.83, representing a year-over-year decrease of 1.2%. However, the consensus EPS estimate has been revised slightly upward over the past month.
Revenues are expected to rise by 1.9% to approximately $12.59 billion compared to the same quarter last year. Coca-Cola has maintained its full-year guidance, expecting organic sales growth of 5% to 6% and an adjusted EPS increase of 2% to 3%.
The company enjoys a consensus "Buy" rating from analysts, with diverse price targets ranging from $59.60 to $86.00. Piper Sandler, for instance, maintains an "Overweight" rating with a price target of $80. Analysts will pay particular attention to sales trends and international development in Coca-Cola's results, which are set to be reported on July 22.
Meanwhile, PepsiCo's solid performance in the second quarter saw an adjusted EPS of $1.62 and revenue of $22.73 billion, outperforming market expectations. The company has attributed this success to its strategic realignment and focus on cost control, aiming to integrate its food and beverage divisions to stabilise its operating margin.
In North America, sales volumes decreased by two percent for beverages and one percent for foods. However, Pepsi Zero Sugar saw double-digit growth in the home market. Internationally, PepsiCo's business is running smoothly and continuing its growth trajectory.
As PepsiCo reaffirms its annual outlook for low single-digit organic revenue growth and adjusted earnings per share at constant currency rates at the same level as last year, a fresh entry or add-on opportunity could present itself for Coca-Cola, provided the numbers align when they report their results on July 22.
For investors, this could be an exciting time as the solid performance of PepsiCo provides a positive signal for Coca-Cola, with potential for further growth and opportunities ahead.
The strong analyst support for Coca-Cola, based on its robust global strength, resilient brand portfolio, and backed by major shareholder Warren Buffett, suggests that investors might be inclined to invest in its upcoming quarterly results, despite projected lower earnings. Meanwhile, the focus on technology and innovation could offer opportunities for PepsiCo to further enhance its business, potentially influencing investors' decisions in the future.
