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

·3 min read

In the latest trading session, PepsiCo (PEP) closed at $130.62, marking a +1.11% move from the previous day. This move lagged the S&P 500's daily gain of 2.38%. Meanwhile, the Dow gained 1.95%, and the Nasdaq, a tech-heavy index, added 3.01%.

Heading into today, shares of the food and beverage company had lost 7.18% over the past month, lagging the Consumer Staples sector's loss of 4.83% and the S&P 500's loss of 0.91% in that time.

Wall Street will be looking for positivity from PEP as it approaches its next earnings report date. This is expected to be April 15, 2021. On that day, PEP is projected to report earnings of $1.12 per share, which would represent year-over-year growth of 4.67%. Our most recent consensus estimate is calling for quarterly revenue of $14.59 billion, up 5.07% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.04 per share and revenue of $75.23 billion. These totals would mark changes of +9.42% and +6.9%, respectively, from last year.

Any recent changes to analyst estimates for PEP should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 has moved 0.42% higher. PEP is currently a Zacks Rank #3 (Hold).

In terms of valuation, PEP is currently trading at a Forward P/E ratio of 21.38. This valuation marks a premium compared to its industry's average Forward P/E of 20.22.

We can also see that PEP currently has a PEG ratio of 3.08. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Beverages - Soft drinks industry currently had an average PEG ratio of 2.74 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 171, putting it in the bottom 33% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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