Core Viewpoint - PepsiCo Inc. has faced significant stock pressure, with a decline of 5.89% in 2025 and 19.5% over the last 12 months, reflecting broader challenges in the consumer staples sector [1][2] Group 1: Stock Performance and Market Context - The total return for PepsiCo stock over the last three years is negative 9.1%, indicating a decline in overall stock value despite a growing dividend yield of 4.02% [4] - Rising inflation and interest rates have pressured the core consumer, contributing to the stock's weak performance [5] - The consumer staples sector, including PepsiCo, has been under pressure for several years, complicating the narrative around interest rate cuts potentially benefiting the stock [2][9] Group 2: Demand Challenges and Competitive Landscape - The adoption of GLP-1 drugs is impacting consumer demand for soft drinks and salty snacks, posing a challenge to PepsiCo's traditional strengths [3] - Consumers are increasingly opting for store brands due to lower prices, which further pressures PepsiCo's market position [6] Group 3: Earnings and Strategic Pressure - PepsiCo's earnings per share (EPS) for the first two quarters were $3.6, down 7% year over year, raising concerns among investors [7] - Elliott Investment Management has taken a $4 billion stake in PepsiCo, urging the company to improve margins and consider divesting low-margin brands [7][8] Group 4: Dividend and Valuation Insights - PepsiCo's dividend yield is currently at 3.99%, with an annual dividend of $5.69 and a payout ratio of 103.64% [9] - The stock appears reasonably valued at around 17.2x forward earnings, trading at a discount to its historical average and the consumer staples sector average [11]

Core Viewpoint - Costco's stock is currently overvalued despite its strong business performance, making Coca-Cola and PepsiCo more attractive investment options for income and value-focused investors [4][14]. Group 1: Costco - Costco operates on a membership model, providing a reliable revenue stream with a high member renewal rate of approximately 90% [2]. - The company is experiencing growth through new store openings and increased customer spending, but its stock valuation is high with P/S, P/E, and P/B ratios above five-year averages [4]. - The dividend yield for Costco is low at around 0.6%, which is disappointing for income-focused investors [5][4]. Group 2: Coca-Cola - Coca-Cola has shown strong performance with a 5% growth in organic revenues in the second quarter, appealing to consumers despite inflation concerns [6][7]. - The stock is reasonably priced with P/S, P/E, and P/B ratios at or slightly below five-year averages, and a dividend yield of 3% [8]. - Coca-Cola is considered a better value than Costco due to its strong business performance and reasonable stock valuation [8][14]. Group 3: PepsiCo - PepsiCo's stock is undervalued with P/S, P/E, and P/B ratios significantly below five-year averages, and a dividend yield of approximately 4% [10]. - The company reported a lower organic sales growth of 2.1% in the second quarter compared to Coca-Cola, indicating underperformance [11]. - PepsiCo is a diversified business with a history of dividend growth, and recent acquisitions may help it regain momentum [12][13].

Core Insights - The Hershey Company reported second-quarter 2025 results with both top and bottom lines exceeding Zacks Consensus Estimates, although the bottom line showed a year-over-year decline [1][9] - Adjusted earnings per share were $1.21, down 4.7% year over year, while consolidated net sales reached $2,614.7 million, a 26% increase from the previous year [1][2] Financial Performance - Consolidated net sales of $2,614.7 million surpassed the Zacks Consensus Estimate of $2,548 million, with organic sales rising 26.3% on a constant-currency basis [2] - Adjusted gross margin contracted to 38.1%, down 510 basis points, primarily due to increased commodity and manufacturing costs [4][9] - Selling, marketing, and administrative expenses rose 11.5% year over year, driven by higher advertising and consumer marketing spending [5] - Adjusted operating profit increased 7.1% year over year to $410.6 million, with the operating margin contracting 280 basis points to 15.7% [6] Segment Performance - North America Confectionery segment net sales were $2,085.5 million, up 32.0% year over year, with volume growth attributed to inventory cycling, Easter holiday timing, and early Halloween shipments [7] - The North America Salty Snacks segment reported net sales of $315.5 million, an 8.8% increase, with volume growth and net price realization contributing to this rise [10] - The International segment posted net sales of $213.7 million, reflecting a 4.4% increase, although income decreased by $5.2 million year over year [12] Financial Health - The company ended the quarter with cash and cash equivalents of $912.4 million and long-term debt of $5,176.4 million [13] - Management expects capital expenditure for 2025 to be in the range of $425 million to $450 million [13] Future Outlook - Management anticipates net sales to increase at least 2% in 2025, with adjusted EPS projected between $5.81 and $6, reflecting a significant decline from 2024 [14] - The effective tax rate is expected to be approximately 27%, with tariff expenses anticipated to be around $170 million to $180 million for the full year [15]

Core Insights - Hershey reported $2.61 billion in revenue for the quarter ended June 2025, a year-over-year increase of 26% [1] - The EPS for the same period was $1.21, compared to $1.27 a year ago, indicating a slight decline [1] - The revenue exceeded the Zacks Consensus Estimate of $2.55 billion by 2.62%, while the EPS surprised by 19.8% against the consensus estimate of $1.01 [1] Revenue Performance - North America net sales reached $2.4 billion, surpassing the five-analyst average estimate of $2.32 billion, with a year-over-year change of 28.4% [4] - International net sales were $213.73 million, slightly below the estimated $227.95 million, but still reflecting a 4.4% increase year-over-year [4] - North America Confectionery net sales were $2.09 billion, exceeding the average estimate of $2.02 billion, with a year-over-year change of 32% [4] - North America Salty Snacks net sales were $315.52 million, above the average estimate of $306.06 million, showing an 8.8% year-over-year increase [4] Segment Income - North America Confectionery segment income was $503.93 million, compared to the average estimate of $470.57 million [4] - Unallocated corporate expenses showed a loss of $179.65 million, better than the estimated loss of $220.51 million [4] - North America Salty Snacks segment income was $66.48 million, exceeding the average estimate of $55.67 million [4] Stock Performance - Hershey shares returned +5.9% over the past month, outperforming the Zacks S&P 500 composite's +3.4% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

分组1: Realty Income - Realty Income is a real estate investment trust (REIT) that owns single-tenant net lease properties, with approximately 75% of its rents coming from the retail sector and the remainder from industrial assets and unique properties like casinos [3][4] - The REIT has a diverse tenant base of nearly 1,600 different tenants, which mitigates risks associated with individual retailers [4] - Realty Income has a strong track record, having increased its dividend annually for 30 consecutive years, and currently offers an attractive dividend yield of 5.6% [5] 分组2: Hormel Foods - Hormel Foods is a food manufacturer with a wide selection of packaged food brands, focusing on protein, and is recognized as a Dividend King with over 50 consecutive annual dividend increases [8][10] - The company currently offers a historically high dividend yield of around 3.8%, despite facing challenges such as rising costs and avian flu [9][10] - Hormel has a significant nonprofit shareholder, the Hormel Foundation, which influences its long-term business decisions to sustain dividend growth [11][12] 分组3: Hershey - Hershey is known for its iconic confection brands and a small portfolio of salty snack brands, with a solid dividend history, although its dividend growth is not consistent annually [8] - The company offers a dividend yield of approximately 3.2% and is currently facing headwinds due to rising cocoa prices [9][10] - The Hershey Trust, a major nonprofit shareholder, plays a crucial role in guiding Hershey's decisions to ensure long-term dividend growth [11][12] 分组4: Investment Strategy - The consumer goods sector offers various investment opportunities, with Realty Income serving as a stable foundational investment, while Hormel and Hershey present more aggressive options despite their current challenges [13][14] - The combination of Realty Income's stability with the potential recovery of Hormel and Hershey makes for an attractive investment strategy [13][14]

Core Strategy - FEMSA is focused on its Forward Strategy, emphasizing long-term value creation of its core businesses and maximizing shareholder value through prudent financial management [1] Share Repurchase Agreement - The company has entered into an accelerated share repurchase (ASR) agreement to buy back $250 million of its American Depositary Shares (ADS) [2] - The ASR agreement will initially deliver 483,559 ADSs on May 20, 2025, with the total number of repurchased shares based on the daily volume-weighted average price during the agreement term [3] Capital Return Strategy - FEMSA plans to return capital to shareholders as a crucial aspect of its overall strategy, following successful divestments related to FEMSA Forward and considering expected capital needs [4] Market Performance - FEMSA's shares have gained 1.8% over the past year, contrasting with a 1.2% decline in the industry, despite facing a soft consumer environment and rising operating expenses [5] Business Segments and Growth Opportunities - The company is progressing on its FEMSA Forward Strategy to drive value in its core businesses, including Retail, Coca-Cola FEMSA, and Digital@FEMSA, while exploring potential divestments [6] - FEMSA's Proximity and Health retail businesses present significant long-term growth opportunities, with plans to accelerate earnings growth through organic expansion [7]

Core Insights - Archer Daniels Midland Company (ADM) reported mixed first-quarter 2025 results, with adjusted earnings per share of 70 cents surpassing the Zacks Consensus Estimate of 69 cents, but revenues fell short of expectations [1][2][3] Financial Performance - Adjusted earnings decreased from $1.46 per share in the year-ago quarter to 70 cents, while reported earnings fell from $1.42 to 61 cents [2][3] - Revenues declined 7.3% year over year to $20.2 billion, missing the consensus estimate of $20.7 billion, impacted by lower revenues across all segments [3][4] - Gross profit decreased 29.4% year over year to $1.2 billion, with gross margin falling 190 basis points to 5.9% [5] Segment Performance - Ag Services & Oilseeds revenues fell 9% year over year to $15.7 billion, while Carbohydrate Solutions revenues decreased 6.2% to $2.6 billion, and Nutrition revenues dipped 1% to $1.8 billion [4] - Adjusted operating profit for Ag Services & Oilseeds plunged 52% year over year to $412 million, affected by lower volumes and margins due to tariff and trade policy uncertainty [6] - Crushing subsegment's operating profit dropped 85% year over year, influenced by lower margins and increased manufacturing costs [7] - Carbohydrate Solutions segment's operating profit dipped 3% to $240 million, with mixed performance across subsegments [9] - Nutrition segment reported an adjusted operating profit of $95 million, up 13% year over year, driven by improvements in Flavors and Animal Nutrition [10] Other Financials - As of March 31, 2025, ADM had cash and cash equivalents of $864 million, long-term debt of $8.3 billion, and shareholders' equity of $22.1 billion [12] - The company used $342 million in cash for operating activities and paid dividends of $247 million in the reported quarter [12] Future Outlook - For 2025, management anticipates adjusted earnings per share to be in the range of $4 to $4.75, with expectations leaning towards the lower end [13]

Core Insights - Hershey reported $2.81 billion in revenue for Q1 2025, a year-over-year decline of 13.8% [1] - The EPS for the same period was $2.09, down from $3.07 a year ago, with a surprise of +7.73% compared to the consensus estimate of $1.94 [1] Revenue Performance - International net sales were $227.48 million, exceeding the average estimate of $224.36 million, but reflecting a year-over-year decline of 15.9% [4] - North America net sales reached $2.58 billion, slightly above the average estimate of $2.57 billion, with a year-over-year decline of 13.6% [4] - North America Confectionery sales were $2.30 billion, matching the average estimate, but down 15% year-over-year [4] - North America Salty Snacks reported $277.80 million, surpassing the average estimate of $272.06 million, showing a year-over-year increase of 1% [4] Segment Income - North America Confectionery segment income was $696.37 million, above the average estimate of $684.23 million [4] - Unallocated corporate expenses showed a loss of $158.84 million, better than the average estimate of -$194.85 million [4] - North America Salty Snacks segment income was $41.85 million, slightly above the average estimate of $41.35 million [4] Stock Performance - Hershey's shares returned +2% over the past month, outperforming the Zacks S&P 500 composite, which declined by -0.7% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3]

Core Viewpoint - The Hershey Company is expected to report a decline in both revenue and earnings for the first quarter of 2025, with significant challenges stemming from high cocoa prices and changing consumer behavior [1][2][3]. Financial Performance - The Zacks Consensus Estimate for Hershey's revenues is $2.82 billion, indicating a 13.3% decrease from the same quarter last year [1]. - The consensus estimate for earnings per share (EPS) has decreased to $1.94, reflecting a 36.8% decline year-over-year [1]. - The North America Confectionery segment is projected to see a 12.1% decline in sales, while the North America Salty Snacks business is expected to decrease by 1.1% [5]. Market Dynamics - Hershey is facing a challenging environment due to historically high cocoa prices and a financially constrained consumer base, leading to a projected adjusted gross margin contraction of 410 basis points [2]. - Shifts in consumer behavior, driven by economic uncertainty, have resulted in reduced foot traffic to convenience and drug stores, negatively impacting impulse sales and market share in the everyday chocolate category [3]. - Increased competition from smaller brands and evolving consumer preferences towards club, dollar, and online shopping channels are further complicating Hershey's competitive landscape [4]. Operational Challenges - Tighter inventory management by retailers is affecting Hershey's operations in North America [5]. - Despite slowing demand and inflationary pressures on key ingredients, benefits from price realization and supply chain productivity improvements may provide some relief [6]. Earnings Outlook - The current model predicts a potential earnings beat for Hershey, supported by a positive Earnings ESP of +2.20% and a Zacks Rank of 3 (Hold) [7].

Core Viewpoint - PepsiCo Inc. experienced a decline in shares following a reported sales drop for the first quarter, reflecting broader challenges in the market [1]. Group 1: Financial Performance - PepsiCo's first-quarter earnings were reported at $1.48 per share, slightly below consensus estimates of $1.49 per share, indicating results were in line with subdued investor expectations [4]. - The company is expected to see an 11% year-on-year decline in earnings for the second quarter, projecting earnings of $2.03 per share, primarily due to weaker Frito sales and operating deleverage [3]. - Management has lowered the full-year EPS growth guidance to around flat, down from a prior projection of mid-single-digit growth, citing higher supply chain costs and macroeconomic volatility [5]. Group 2: Analyst Ratings and Price Targets - BofA Securities analyst Bryan Spillane maintained a Neutral rating on PepsiCo, reducing the price target from $155 to $150, while noting that the quarterly results were broadly in line with consensus estimates [2]. - Goldman Sachs analyst Bonnie Herzog reiterated a Buy rating with a price target of $160, acknowledging that the results were disappointing but not unexpected [4]. Group 3: Future Outlook - Despite challenges anticipated in 2025, including tariff costs of around 40 cents per share, there is potential for PepsiCo's growth to reaccelerate due to earlier comparisons, initial returns on investments, continued international strength, and a focus on innovation [5].