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PepsiCo (PEP) Stock Moves -0.87%: What You Should Know

Zacks Equity Research
·3 mins read

PepsiCo (PEP) closed at $131 in the latest trading session, marking a -0.87% move from the prior day. This change was narrower than the S&P 500's daily loss of 2.37%. Elsewhere, the Dow lost 1.92%, while the tech-heavy Nasdaq lost 3.02%.

Coming into today, shares of the food and beverage company had lost 3.75% in the past month. In that same time, the Consumer Staples sector lost 1.1%, while the S&P 500 lost 2.31%.

Investors will be hoping for strength from PEP as it approaches its next earnings release, which is expected to be October 1, 2020. In that report, analysts expect PEP to post earnings of $1.47 per share. This would mark a year-over-year decline of 5.77%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $17.26 billion, up 0.44% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.34 per share and revenue of $68.30 billion, which would represent changes of -3.44% and +1.7%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for PEP. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for 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.

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 has moved 0.16% lower. PEP currently has a Zacks Rank of #3 (Hold).

In terms of valuation, PEP is currently trading at a Forward P/E ratio of 24.77. Its industry sports an average Forward P/E of 21.96, so we one might conclude that PEP is trading at a premium comparatively.

It is also worth noting that PEP currently has a PEG ratio of 4.42. 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 was holding an average PEG ratio of 4.42 at yesterday's closing price.

The Beverages - Soft drinks industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 174, which puts it in the bottom 32% 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.

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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Zacks Investment Research