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

In the latest trading session, PepsiCo (PEP) closed at $152.02, marking a modest increase of 0.34% from the previous day's closing price. This upswing occurred despite a notable decline in the broader market, with the S&P 500 experiencing a 1.59% drop, the Dow Jones falling by 0.45%, and the Nasdaq Composite declining 2.78%.

Despite the recent gain, it is noteworthy that PepsiCo had only grown 0.76% over the past month. This rise is significantly lower than the 6.01% growth seen in the Consumer Staples sector, while it outperformed the S&P 500, which fell by 2.23% in the same period.

The upcoming earnings report for PepsiCo is highly anticipated by investors. Analysts are predicting that the company will report an earnings per share (EPS) of $1.54. This estimate reflects a 4.35% decrease compared to the same quarter last year. Furthermore, the latest consensus estimate forecasts the company's revenue at $17.8 billion, representing a 2.45% decline from the corresponding quarter in the previous year.

For the full year, analysts project earnings of $8.30 per share and revenue totaling $91.75 billion. These figures indicate minor changes of +1.72% and -0.11%, respectively, compared to last year.

Investors should pay attention to recent adjustments in analyst forecasts for PepsiCo, as these changes often reflect shifting short-term business trends. Positive revisions usually indicate a growing confidence among analysts regarding the company’s performance and potential profitability.

Research shows that changes in estimates are closely linked to stock price movements. To aid investors in assessing these dynamics, a ranking system known as the Zacks Rank has been developed. This model captures estimate revisions and categorizes stocks based on this data.

The Zacks Rank scales from #1 (Strong Buy) to #5 (Strong Sell), and historical data indicates that stocks rated #1 have outperformed the market, achieving an average annual gain of +25% since 1988. Over the last month, the consensus EPS estimate for PepsiCo has dropped by 2.55%, currently positioning the company at a Zacks Rank of #4 (Sell).

Valuation metrics are also crucial for investors. Currently, PepsiCo’s Forward P/E ratio is 18.26, which is more favorable compared to the industry average Forward P/E of 18.98.

Additionally, the company holds a PEG ratio of 3.16. The PEG ratio is similar to the common P/E ratio but accounts for expected earnings growth as well. By comparison, the average PEG ratio in the Beverages - Soft Drinks industry stands at 2.46.

PepsiCo is part of the Beverages - Soft Drinks industry, which is categorized within the Consumer Staples sector. This industry currently holds a Zacks Industry Rank of 145, placing it in the bottom 43% among over 250 industries.

The Zacks Industry Rank assesses the strength of industry groups based on the average Zacks Rank of the individual stocks they encompass. Historically, industries rated in the top 50% tend to outperform the bottom half two to one.

For ongoing updates regarding these stock metrics and others that may influence trading decisions, investors are encouraged to stay informed.

PepsiCo, Market, Earnings