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

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PepsiCo (PEP - Free Report) closed at $186.58 in the latest trading session, marking a +0.53% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.2%. Elsewhere, the Dow lost 0.38%, while the tech-heavy Nasdaq lost 9.78%.

Heading into today, shares of the food and beverage company had gained 2.23% over the past month, lagging the Consumer Staples sector's gain of 5.56% and the S&P 500's gain of 4.16% in that time.

Investors will be hoping for strength from PepsiCo as it approaches its next earnings release, which is expected to be July 13, 2023. The company is expected to report EPS of $1.95, up 4.84% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $21.6 billion, up 6.81% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.29 per share and revenue of $90.5 billion, which would represent changes of +7.36% and +4.75%, respectively, from the prior year.

Any recent changes to analyst estimates for PepsiCo should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 0.09% lower. PepsiCo is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, PepsiCo currently has a Forward P/E ratio of 25.46. This represents a premium compared to its industry's average Forward P/E of 23.24.

It is also worth noting that PEP currently has a PEG ratio of 3.25. 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 2.51 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 52, which puts it in the top 21% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

To follow PEP in the coming trading sessions, be sure to utilize Zacks.com.


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