Wall Street has an exciting week ahead as the two biggest beverage companies, Coca Cola and PepsiCo, are set to battle it out in earnings. In addition, CVS Health is also set to announce earnings this week. What can investors expect?
Coca-Cola (NYSE: KO):
Coca-Cola is scheduled to announce its fourth quarter and full year 2014 earnings results on Tuesday, February 10th before the market opens. The company is expected to post earnings of $0.42 a share, down from $0.46 a share the same quarter a year prior. Coca-Cola is also expected to post $10.76 billion in revenue, marking a -3% decrease on a year-over-year basis. Analysts have estimated that Coca-Cola’s full year 2015 earnings per share will be $2.02 and $45.73 billion in revenue, indicating no expectations of growth.
If Coca-Cola meets analysts’ consensus estimates in Q4, this will mark the seventh out of the past eight quarters in which the company reports a negative decrease in revenue year-over-year.
Coca-Cola rakes in the majority of its profit outside of the United States. The company warned investors in December that foreign currencies would cut its profit by 6% to 7% in Q4 due to the strengthening dollar.
Investors will be looking for an update on new drinks, such as Coca-Cola Life, the green-labeled, low-sugar soft drink which caters to consumers who are moving away from artificially-sweetened diet drinks.
Investors will also be looking for an update on the two new strategic partnerships with Keurig Green Mountain and Monster Beverage. Coca-Cola bought back a 16.7% stake in both companies in 2014. With that said, investors will be looking to see if Coca-Cola will acquire either company entirely.
On average, the top analyst consensus for Coca-Cola on TipRanks is Hold.
PepsiCo (NYSE: PEP):
Coca-Cola rival PepsiCo is set to announce its fourth quarter and full year 2014 earnings report on Wednesday, February 11th before the market opens. The company is expected to post $1.08 earnings per share, up from $1.05 earnings per share the same quarter last year.
Investors will be looking for an update from Pepsi on its new Pepsi True, a direct competitor with Coca Cola Life and a beverage made in attempt to battle declining diet soda volumes in the domestic market.
In addition, PepsiCo recently announced a new quarterly dividend of $0.66 per share to be paid to shareholders on Tuesday, March 31st. This represents a $2.62 annualized dividend and a dividend yield of 2.71%.
On average, the top analyst consensus for PepsiCo on TipRanks is Strong Buy.
CVS Health (NYSE: CVS):
CVS Health is scheduled to announce its fourth quarter 2014 earnings results on Tuesday, February 10th before the market opens. The company is expected to post $1.21 earnings per share, up from $1.12 earnings per share the same quarter a year prior. CVS is also expected to post $36.06 billion in revenue, marking a 9.8% increase on a year-over-year basis.
CVS is expected to thrive from prescription growth and its specialty drugs business due to a growing senior population and a greater number of individuals eligible for government health care benefits because of the Affordable Care Act. However, if CVS matches analysts’ consensus estimate, the company’s earnings per share growth rate would mark the third quarter in a row of a slowdown. With that said, the same quarter last year was the last full quarter that included the sale of tobacco products.
CVS is also expected to benefit from the growing specialty drug category with treatments for diseases like hepatitis and multiple sclerosis. Most recently, CVS made a deal with Gilead Sciences in which the pharmacy will exclusively distribute GILD’s Sovaldi and Harvoni in favor of competitors to treat patients with hepatitis C.
On average, the top analyst consensus for CVS on TipRanks is Moderate Buy.