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PepsiCo (PEP) Dips More Than Broader Markets: What You Should Know

·3 min read

In the latest trading session, PepsiCo (PEP) closed at $169.51, marking a -0.67% move from the previous day. This change lagged the S&P 500's daily loss of 0.41%.

Coming into today, shares of the food and beverage company had lost 1.83% in the past month. In that same time, the Consumer Staples sector lost 3.49%, while the S&P 500 lost 5.13%.

Investors will be hoping for strength from PepsiCo as it approaches its next earnings release, which is expected to be October 12, 2022. In that report, analysts expect PepsiCo to post earnings of $1.84 per share. This would mark year-over-year growth of 2.79%. Meanwhile, our latest consensus estimate is calling for revenue of $20.83 billion, up 3.18% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $6.66 per share and revenue of $83.92 billion, which would represent changes of +6.39% and +5.6%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for PepsiCo. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.17% higher. PepsiCo is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note PepsiCo's current valuation metrics, including its Forward P/E ratio of 25.63. Its industry sports an average Forward P/E of 23.59, so we one might conclude that PepsiCo is trading at a premium comparatively.

Investors should also note that PEP has a PEG ratio of 3.34 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Beverages - Soft drinks industry currently had an average PEG ratio of 3.2 as of yesterday's close.

The Beverages - Soft drinks industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 93, putting it in the top 37% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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