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PepsiCo (PEP) Gains But Lags Market: What You Should Know

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PepsiCo (PEP) closed at $157.79 in the latest trading session, marking a +1.07% move from the prior day. This change lagged the S&P 500's 1.46% gain on the day. Elsewhere, the Dow gained 1%, while the tech-heavy Nasdaq lost 0.17%.

Heading into today, shares of the food and beverage company had lost 10.51% over the past month, lagging the Consumer Staples sector's loss of 7.99% and the S&P 500's loss of 6.94% in that time.

PepsiCo will be looking to display strength as it nears its next earnings release, which is expected to be July 12, 2022. On that day, PepsiCo is projected to report earnings of $1.72 per share, which would represent no growth from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $19.77 billion, up 2.85% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $6.64 per share and revenue of $83.27 billion, which would represent changes of +6.07% and +4.77%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for PepsiCo. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. PepsiCo is currently a Zacks Rank #3 (Hold).

Digging into valuation, PepsiCo currently has a Forward P/E ratio of 23.51. This represents a premium compared to its industry's average Forward P/E of 20.34.

Meanwhile, PEP's PEG ratio is currently 3.1. 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 was holding an average PEG ratio of 2.78 at yesterday's closing price.

The Beverages - Soft drinks industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 150, which puts it in the bottom 41% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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