In the latest trading session, PepsiCo (PEP) closed at $107.34, marking a -0.72% move from the previous day. This move was narrower than the S&P 500's daily loss of 3.29%. Meanwhile, the Dow lost 3.15%, and the Nasdaq, a tech-heavy index, lost 4.08%.
Prior to today's trading, shares of the food and beverage company had lost 4.6% over the past month. This has lagged the Consumer Staples sector's loss of 1.24% and the S&P 500's gain of 0.44% in that time.
PEP will be looking to display strength as it nears its next earnings release, which is expected to be February 12, 2019. On that day, PEP is projected to report earnings of $1.49 per share, which would represent year-over-year growth of 13.74%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $19.54 billion, up 0.08% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $5.65 per share and revenue of $64.74 billion, which would represent changes of +8.03% and +1.92%, 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. The Zacks Consensus EPS estimate has moved 0.62% lower within the past month. PEP currently has a Zacks Rank of #4 (Sell).
Looking at its valuation, PEP is holding a Forward P/E ratio of 19.13. This represents a discount compared to its industry's average Forward P/E of 22.18.
We can also see that PEP currently has a PEG ratio of 2.71. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Beverages - Soft drinks was holding an average PEG ratio of 2.13 at yesterday's closing price.
The Beverages - Soft drinks industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 189, putting it in the bottom 26% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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