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PepsiCo (PEP) Stock Sinks As Market Gains: Here's Why

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The latest trading session saw PepsiCo (PEP - Free Report) ending at $165.07, denoting a -0.5% adjustment from its last day's close. The stock trailed the S&P 500, which registered a daily gain of 0.27%. Meanwhile, the Dow lost 0.31%, and the Nasdaq, a tech-heavy index, added 0.88%.

The food and beverage company's shares have seen a decrease of 8.29% over the last month, not keeping up with the Consumer Staples sector's loss of 2.77% and the S&P 500's gain of 2.85%.

Analysts and investors alike will be keeping a close eye on the performance of PepsiCo in its upcoming earnings disclosure. The company's earnings report is set to go public on July 11, 2024. It is anticipated that the company will report an EPS of $2.16, marking a 3.35% rise compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $22.68 billion, up 1.59% from the year-ago period.

For the full year, the Zacks Consensus Estimates project earnings of $8.16 per share and a revenue of $94.53 billion, demonstrating changes of +7.09% and +3.35%, respectively, from the preceding year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for PepsiCo. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. 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, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, there's been a 0.01% rise in the Zacks Consensus EPS estimate. PepsiCo is currently a Zacks Rank #2 (Buy).

Looking at valuation, PepsiCo is presently trading at a Forward P/E ratio of 20.32. Its industry sports an average Forward P/E of 18.99, so one might conclude that PepsiCo is trading at a premium comparatively.

One should further note that PEP currently holds a PEG ratio of 2.71. 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 had an average PEG ratio of 2.71 as trading concluded yesterday.

The Beverages - Soft drinks industry is part of the Consumer Staples sector. This industry, currently bearing a Zacks Industry Rank of 53, finds itself in the top 22% echelons of all 250+ industries.

The Zacks Industry Rank is ordered 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.

Don't forget to use to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.

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