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PepsiCo (PEP) Dips More Than Broader Markets: What You Should Know

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PepsiCo (PEP - Free Report) closed the most recent trading day at $161.20, moving -1.5% from the previous trading session. This move lagged the S&P 500's daily loss of 0.58%. Elsewhere, the Dow lost 0.75%, while the tech-heavy Nasdaq added 0.34%.

Heading into today, shares of the food and beverage company had lost 6.74% over the past month, lagging the Consumer Staples sector's loss of 5.52% and outpacing the S&P 500's loss of 10.53% in that time.

PepsiCo will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.72, unchanged from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $19.77 billion, up 2.85% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.64 per share and revenue of $83.27 billion. These totals would mark changes of +6.07% and +4.77%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for PepsiCo. 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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 remained stagnant. PepsiCo is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, PepsiCo currently has a Forward P/E ratio of 24.64. This valuation marks a premium compared to its industry's average Forward P/E of 20.41.

We can also see that PEP currently has a PEG ratio of 3.25. 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 industry currently had an average PEG ratio of 2.68 as of yesterday's close.

The Beverages - Soft drinks industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 97, which puts it in the top 39% 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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