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

Zacks Equity Research

In the latest trading session, PepsiCo (PEP) closed at $141.98, marking a +0.62% move from the previous day. This move outpaced the S&P 500's daily loss of 0.38%. Elsewhere, the Dow lost 0.46%, while the tech-heavy Nasdaq added 0.17%.

Prior to today's trading, shares of the food and beverage company had lost 0.94% over the past month. This has was narrower than the Consumer Staples sector's loss of 4.58% and the S&P 500's loss of 4.88% in that time.

Investors will be hoping for strength from PEP as it approaches its next earnings release. On that day, PEP is projected to report earnings of $1.02 per share, which would represent 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.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.89 per share and revenue of $70.06 billion, which would represent changes of +6.51% and +4.32%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for PEP. 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.

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.

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. Within the past 30 days, our consensus EPS projection has moved 0.97% lower. PEP is currently a Zacks Rank #3 (Hold).

Looking at its valuation, PEP is holding a Forward P/E ratio of 23.94. For comparison, its industry has an average Forward P/E of 20.73, which means PEP is trading at a premium to the group.

Also, we should mention that PEP has a PEG ratio of 3.28. 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 2.2 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 54, which puts it in the top 22% 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.

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


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