11:20 AM EDT, 04/23/2024 (MT Newswires) -- PepsiCo's ( PEP ) Q1 core EPS of $1.61 surpassed Wall Street's estimate of $1.52, driven by revenue growth and improved gross margins, Wedbush said in a note Tuesday.

PepsiCo's ( PEP ) Q1 revenue exceeded expectations with a 2.3% growth, 90 basis points above Wall Street's forecast, Wedbush said. "On an organic basis, 2.7% revenue growth was entirely price led, as volumes declined 2%, which marked a sequential improvement in trend," it added.

PepsiCo ( PEP ) reaffirmed its 2024 guidance, expecting organic revenue growth of over 4%, EPS growth of over 8% in local currency, and $8.2 billion in cash returns, Wedbush said.

Growth in international markets outperformed domestic ones, with combined high single-digit to low double-digit organic revenue growth. Despite sequential slowdowns in the company's Frito-Lay North America and PepsiCo Beverages North America units, growth is expected to pick up, "particularly as we get into the back half of the year," Wedbush said.

Wedbush has an outperform rating on PepsiCo ( PEP ) with a 12-month price target of $195.

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