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

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In the latest trading session, PepsiCo (PEP) closed at $162.03, marking a +0.82% move from the previous day. This move outpaced the S&P 500's daily loss of 0.13%. At the same time, the Dow lost 0.15%, and the tech-heavy Nasdaq gained 0.14%.

Coming into today, shares of the food and beverage company had lost 4.24% in the past month. In that same time, the Consumer Staples sector lost 1.05%, while the S&P 500 lost 3.32%.

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.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.64 per share and revenue of $83.27 billion. These totals would mark changes of +6.07% and +4.77%, respectively, from last year.

Any recent changes to analyst estimates for PepsiCo should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. Within the past 30 days, our consensus EPS projection remained stagnant. PepsiCo is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that PepsiCo has a Forward P/E ratio of 24.2 right now. For comparison, its industry has an average Forward P/E of 20.66, which means PepsiCo is trading at a premium to the group.

Also, we should mention that PEP has a PEG ratio of 3.19. 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 2.83 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 109, putting it in the top 44% 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.

To follow PEP in the coming trading sessions, be sure to utilize Zacks.com.


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