In the latest trading session, PepsiCo (PEP) closed at $137.26, marking a -0.61% move from the previous day. This change was narrower than the S&P 500's 1.71% loss on the day. At the same time, the Dow lost 0.98%, and the tech-heavy Nasdaq lost 1.87%.
Coming into today, shares of the food and beverage company had lost 4.32% in the past month. In that same time, the Consumer Staples sector lost 6.29%, while the S&P 500 lost 9.13%.
PEP will be looking to display strength as it nears 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.
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.
It is also important to note the recent changes to analyst estimates for PEP. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.83% lower. PEP is currently a Zacks Rank #3 (Hold).
Valuation is also important, so investors should note that PEP has a Forward P/E ratio of 23.43 right now. This represents a premium compared to its industry's average Forward P/E of 19.12.
We can also see that PEP currently has a PEG ratio of 3.21. 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 2.18 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 72, which puts it in the top 29% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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