PepsiCo Raises Guidance After Earnings Beat
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PepsiCo on Wednesday again lifted its sales outlook for the year as it continues to push through price increases on its snacks and drinks, sending shares up $6.80, or 4.2%, to $169.39. The beverage and snacks giant posted better-than-expected quarterly earnings and raised its full-year guidance for sales and profits. It now expects organic sales to rise 12% this year, double the original forecast at the outset of the year, and forecast per-share earnings growth of 10% when excluding the effects of currency translation, up from 8% previously. PepsiCo also signaled it is ready to keep raising prices if costs continue to rise. Overall, PepsiCo reported a profit of $2.70 billion, or $1.95 a share, compared with $2.22 billion, or $1.60, in the prior-year period. Excluding certain items, such as the divestiture of Tropicana and other juice brands. PepsiCo said per-share earnings were $1.97. Analyst polled by FactSet expected per-share earnings of $1.84. Revenue came in at $21.97 billion, up nearly 9% from a year ago. Analysts surveyed by FactSet had expected revenue of $20.83 billion.
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The Switzerland stock market ended marginally down on Wednesday after a choppy ride with investors looking for direction ahead of crucial U.S. inflation data, due on Thursday. The benchmark SMI, which touched a high of 10,249.91 and a low of 10,139.66, ended at 10,199.32, down 8.51 points from the previous close. Credit Suisse ended lower by 4.2% on a Bloomberg report that it is facing a U.S. tax probe. UBS Group drifted down 2.1%, Logitech shed 1.6%, Sonova ended 1.5% down, and Partners Group losst about 1.2%. Swiss Life Holding and Swisscom both lost nearly 1%. Richemont rallied nearly 2%. Sika gained about 1.9%, while Swiss Re, Nestle and ABB posted modest gains. Among the stocks in the Mid Price Index, Zur Rose ended lower by about 4.4%. Flughafen Zurich lost 2.7%, while Lindt & Spruengli, Temenos Group and SIG Combibloc declined 1.4 to 2%. Baloise holding, Schindler Holding, Schindler Ps and Dufry also ended notably lower, while Swatch Group, Belimo Holding and Kuehne & Nagel gained 2.8%, 2% and 1.6%, respectively.
European stocks extended their recent run of losses on Wednesday, with U.K. assets in the spotlight once again, after investors were upended by Bank of England Gov. Andrew Bailey's remarks that the U.K. central bank will stop buying gilts this week as scheduled. The Stoxx Europe 600 index closed down 0.5% at 385.9 points. In Paris, the CAC 40 and SBF 120 lost 0.3% and 0.4% respectively. The DAX 40 in Frankfurt declined by 0.4% and the FTSE 100 in London slipped 0.9%. Real estate group Icade dropped 5.4% after Goldman Sachs lowered its recommendation on the stock from "neutral" to "sell" and its price target from €43.40 to €32.50. The bank also downgraded property company Covivio (-4.6%) from "buy" to "neutral" and lowered its target price from EUR 57.30 to EUR 50.50. Moody's Investors Service lowered the outlook on the "Baa3" credit rating of automotive supplier Valeo (-3.1%) from "stable" to "negative". The world's number one luxury goods company LVMH (+1.9%) reported third-quarter sales of 19.75 billion euros on Tuesday evening, about 5% above consensus and about 3% above Deutsche Bank's expectations, the German bank noted. LVMH said it was confident of continued double-digit sales growth despite the sharp slowdown in the global economy and inflationary pressures. In the third quarter, the group's sales rose 27% on a reported basis and 19% on a like-for-like basis. The CGT union at energy producer TotalEnergies (-1.4%) remained adamant on Wednesday about opening wage negotiations "without conditions", following an initial meeting with the group's management, which the union now says is open to negotiations if fuel deliveries resume, AFP reported. Dutch medical technology group Philips (down 12.3% in Amsterdam) announced its third-quarter results had been affected by supply problems. The company also issued a more pessimistic forecast for its turnover in the last quarter of the year.
U.S. stocks slipped Wednesday in the wake of new inflation data and the release of the minutes of the September meeting of the Federal Reserve’s rate-setting board. The S&P 500 edged down 11.81 points, or 0.3%, to 3577.03, a nearly two-year low. The Dow Jones Industrial Average lost 28.34 points, or 0.1%, closing at 29210.85. The Nasdaq Composite dropped 9.09 points, or 0.1%, to 10417.10, a day after the tech-heavy index entered its second bear market of 2022, marking a drop of more than 20% from its recent high on Aug. 15. Corporate earnings over the next several weeks will also provide insight into how businesses are dealing with price pressures. The coming days will bring updates from a range of companies including Delta Air Lines and banks such as JPMorgan Chase and Citigroup. Cruise companies were the best performers in the S&P 500 after UBS upgraded its recommendation for Norwegian Cruise (+12%) to ‚Buy’ in response to the group's reassuring booking figures. Royal Caribbean Group added more than 11% and Carnival gained 10%. Semiconductor maker Intel (+1.2%), hurt by a drop in demand for computers, may announce thousands of job cuts by the end of the month, Bloomberg news agency reported. Cryptocurrency data centre group Applied Blockchain (+3.6%) reported a quarterly loss and announced it was renaming itself Applied Digital. Coal producer Peabody Energy (+1.1%) is negotiating a tie-up with an Australian rival, a deal that could create a new global giant worth $6bn.
Stocks in Asia mostly fell, with Japan’s Nikkei 225 down 0.5 per cent to 25,260 points and South Korea’s Kospi declining by 0.6 per cent. On the other hand, Toshiba rallies by 8.6 per cent. Apparently, a group led by Japan Industrial Partners is to acquire the company for 2.8 trillion yen. The Hang Seng in Hong Kong edged 1% lower while China’s Shanghai Composite added 0.2%.
Long-dated U.S. government debt yields slipped on Wednesday following the release of the Federal Reserve’s September meeting minutes, which offered little fresh insights into policy makers’ thinking about the path of future rate hikes. The 10-year Treasury note eased by 4 basis points to 3.901%. The 2-year Treasury note fell slightly by 1 basis point to 4.287%.
CS cuts Swiss Re target to CHF 87 (91) - Outperform
Goldman Sachs raises LVMH target to EUR 820 (780) - Buy
JP Morgan reduces Givaudan target to CHF 2,700 (3,300) - Neutral
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