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PepsiCo (PEP) Gains As Market Dips: What You Should Know

Zacks Equity Research

PepsiCo (PEP) closed at $105.18 in the latest trading session, marking a +1.2% move from the prior day. This change outpaced the S&P 500's 2.93% loss on the day. Meanwhile, the Dow lost 3.04%, and the Nasdaq, a tech-heavy index, lost 0.27%.

Heading into today, shares of the food and beverage company had lost 28.4% over the past month, lagging the Consumer Staples sector's loss of 27.92% and outpacing the S&P 500's loss of 31.71% in that time.

Investors will be hoping for strength from PEP as it approaches its next earnings release, which is expected to be April 28, 2020. In that report, analysts expect PEP to post earnings of $1.02 per share. This would mark year-over-year growth of 5.15%. Our most recent consensus estimate is calling for quarterly revenue of $13.24 billion, up 2.73% from the year-ago period.

PEP's full-year Zacks Consensus Estimates are calling for earnings of $5.84 per share and revenue of $70.07 billion. These results would represent year-over-year changes of +5.61% and +4.33%, respectively.

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. 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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.82% lower within the past month. PEP is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note PEP's current valuation metrics, including its Forward P/E ratio of 17.8. This represents a premium compared to its industry's average Forward P/E of 14.25.

Investors should also note that PEP has a PEG ratio of 2.44 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 1.37 as of yesterday's close.

The Beverages - Soft drinks industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 100, which puts it in the top 40% 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.

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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