PepsiCo forecasts 2024 revenue growth of 4%, below estimates

Investing.com -- PepsiCo (NASDAQ:PEP) has unveiled a full-year forecast for organic revenue growth of at least 4%, below Bloomberg consensus expectations of 5.2%, as the food and beverage group flagged waning benefits from elevated prices.

Soaring post-COVID inflation has helped to fuel top-line growth at Pepsi, although these price gains have begun to fade due in part to higher interest rates.

In a statement, Chief Executive Officer Ramon Laguarta said marketplace conditions are "changing" heading into its 2024 fiscal year, with shopping behaviors reverting "to pre-pandemic norms and net revenue realization [moderating] as inflationary pressures are expected to abate."

In Pepsi's fourth quarter, core per-share earnings grew to $1.78 from $1.67 year-on-year, despite an uptick in costs related to items like cooking oil and seasonal ingredients denting income by eight percentage points at its crucial Frito-Lay North America division.

Shares in the Doritos chips owner were volatile in premarket U.S. trading on Friday.

Laguarta said he was pleased with Pepsi's overall performance in 2023, but noted the impact of macroeconomic volatility, geopolitical tensions and international conflicts.

Analysts at CFRA reduced their rating of Pepsi to "Buy" from "Strong Buy," writing in a note that they have "near-term concerns" over slowing earnings growth. They added that volumes are likely to remain "challenged by consumer pushback to product price increases."