Back to top

Image: Bigstock

PepsiCo (PEP) Gains But Lags Market: What You Should Know

Read MoreHide Full Article

In the latest trading session, PepsiCo (PEP - Free Report) closed at $155.76, marking a +0.19% move from the previous day. The stock lagged the S&P 500's daily gain of 0.23%.

Heading into today, shares of the food and beverage company had lost 0.68% over the past month, outpacing the Consumer Staples sector's loss of 1.27% and lagging the S&P 500's gain of 0.65% in that time.

Investors will be hoping for strength from PEP as it approaches its next earnings release, which is expected to be October 5, 2021. The company is expected to report EPS of $1.72, up 3.61% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $19.37 billion, up 7.1% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.24 per share and revenue of $77.27 billion. These totals would mark changes of +13.04% and +9.8%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for PEP. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. The Zacks Consensus EPS estimate has moved 0.01% higher within the past month. PEP currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that PEP has a Forward P/E ratio of 24.93 right now. This valuation marks a premium compared to its industry's average Forward P/E of 23.68.

Investors should also note that PEP has a PEG ratio of 2.96 right now. 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. Beverages - Soft drinks stocks are, on average, holding a PEG ratio of 2.48 based on yesterday's closing prices.

The Beverages - Soft drinks industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 121, which puts it in the top 48% 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.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


PepsiCo, Inc. (PEP) - free report >>

Published in