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

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In the latest close session, PepsiCo (PEP - Free Report) was down 2.29% at $143.68. This change lagged the S&P 500's 0.46% gain on the day. Elsewhere, the Dow saw an upswing of 0.17%, while the tech-heavy Nasdaq appreciated by 0.57%.

Shares of the food and beverage company have appreciated by 1.07% over the course of the past month, outperforming the Consumer Staples sector's loss of 0.09%, and lagging the S&P 500's gain of 4.22%.

Analysts and investors alike will be keeping a close eye on the performance of PepsiCo in its upcoming earnings disclosure. The company is predicted to post an EPS of $2.24, indicating a 14.29% growth compared to the equivalent quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $29.02 billion, indicating a 4.44% growth compared to the corresponding quarter of the prior year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $8.12 per share and a revenue of $93.54 billion, representing changes of -0.49% and +1.84%, respectively, from the prior year.

Investors should also pay attention to any latest changes in analyst estimates for PepsiCo. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending 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, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.06% upward. As of now, PepsiCo holds a Zacks Rank of #3 (Hold).

In the context of valuation, PepsiCo is at present trading with a Forward P/E ratio of 18.12. This represents a premium compared to its industry average Forward P/E of 17.

One should further note that PEP currently holds a PEG ratio of 5.07. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As of the close of trade yesterday, the Beverages - Soft drinks industry held an average PEG ratio of 2.33.

The Beverages - Soft drinks industry is part of the Consumer Staples sector. Currently, this industry holds a Zacks Industry Rank of 157, positioning it in the bottom 37% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.


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