Wrapping up Q3 earnings, we look at the numbers and key takeaways for the beverages, alcohol, and tobacco stocks, including PepsiCo (NASDAQ: PEP) and its peers.

These companies' performance is influenced by brand strength, marketing strategies, and shifts in consumer preferences. Changing consumption patterns are particularly relevant and can be seen in the rise of cannabis, craft beer, and vaping or the steady decline of soda and cigarettes. Companies that spend on innovation to meet consumers where they are with regards to trends can reap huge demand benefits while those who ignore trends can see stagnant volumes. Finally, with the advent of the social media, the cost of starting a brand from scratch is much lower, meaning that new entrants can chip away at the market shares of established players.

The 14 beverages, alcohol, and tobacco stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.3% while next quarter’s revenue guidance was in line.

In light of this news, share prices of the companies have held steady as they are up 3% on average since the latest earnings results.

PepsiCo (NASDAQ: PEP)

With a history that goes back more than a century, PepsiCo (NASDAQ: PEP) is a household name in food and beverages today and best known for its flagship soda.

PepsiCo reported revenues of $23.94 billion, up 2.7% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with revenue in line with analysts’ estimates but a slight miss of analysts’ organic revenue estimates.

Interestingly, the stock is up 8.5% since reporting and currently trades at $150.59.

Read our full report on PepsiCo here, it’s free for active Edge members.

Best Q3: Celsius (NASDAQ: CELH)

With its proprietary MetaPlus formula as the basis for key products, Celsius (NASDAQ: CELH) offers energy drinks that feature natural ingredients to help in fitness and weight management.

Celsius reported revenues of $725.1 million, up 173% year on year, outperforming analysts’ expectations by 1.2%. The business had an exceptional quarter with a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.

Celsius achieved the fastest revenue growth among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 27.8% since reporting. It currently trades at $43.79.

Is now the time to buy Celsius? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: Altria (NYSE: MO)

Best known for its Marlboro brand of cigarettes, Altria (NYSE: MO) offers tobacco and nicotine products.

Altria reported revenues of $5.25 billion, down 1.7% year on year, falling short of analysts’ expectations by 1.3%. It was a slower quarter as it posted a significant miss of analysts’ gross margin estimates and a slight miss of analysts’ revenue estimates.

As expected, the stock is down 5% since the results and currently trades at $58.88.

Read our full analysis of Altria’s results here.

Keurig Dr Pepper (NASDAQ: KDP)

Born out of a 2018 merger between Keurig Green Mountain and Dr Pepper Snapple, Keurig Dr Pepper (NASDAQ: KDP) is a consumer staples powerhouse boasting a portfolio of beverages including sodas, coffees, and juices.

Keurig Dr Pepper reported revenues of $4.31 billion, up 10.7% year on year. This number surpassed analysts’ expectations by 3.8%. Zooming out, it was a satisfactory quarter as it also logged an impressive beat of analysts’ revenue estimates but a slight miss of analysts’ gross margin estimates.

The stock is up 8.7% since reporting and currently trades at $29.53.

Read our full, actionable report on Keurig Dr Pepper here, it’s free for active Edge members.

Zevia (NYSE: ZVIA)

With a primary focus on soda but also a presence in energy drinks and teas, Zevia (NYSE: ZVIA) is a better-for-you beverage company.

Zevia reported revenues of $40.84 million, up 12.3% year on year. This result beat analysts’ expectations by 3.7%. It was an exceptional quarter as it also produced EBITDA guidance for next quarter exceeding analysts’ expectations and a solid beat of analysts’ EBITDA estimates.

Zevia pulled off the highest full-year guidance raise among its peers. The stock is up 10.8% since reporting and currently trades at $2.62.

Read our full, actionable report on Zevia here, it’s free for active Edge members.

Market Update

Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.

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