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

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PepsiCo (PEP - Free Report) closed at $131.69 in the latest trading session, marking a -0.48% move from the prior day. This move lagged the S&P 500's daily gain of 0.38%. At the same time, the Dow lost 0.04%, and the tech-heavy Nasdaq gained 0.73%.

Prior to today's trading, shares of the food and beverage company had gained 3.24% over the past month. This has outpaced the Consumer Staples sector's gain of 0.54% and the S&P 500's gain of 3.19% in that time.

PEP will be looking to display strength as it nears its next earnings release, which is expected to be July 9, 2019. On that day, PEP is projected to report earnings of $1.50 per share, which would represent a year-over-year decline of 6.83%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $16.42 billion, up 2.08% from the year-ago period.

PEP's full-year Zacks Consensus Estimates are calling for earnings of $5.51 per share and revenue of $66.52 billion. These results would represent year-over-year changes of -2.65% and +2.88%, respectively.

Investors might also notice recent changes to analyst estimates for PEP. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. Within the past 30 days, our consensus EPS projection remained stagnant. PEP is currently sporting a Zacks Rank of #2 (Buy).

Digging into valuation, PEP currently has a Forward P/E ratio of 24.01. Its industry sports an average Forward P/E of 23.81, so we one might conclude that PEP is trading at a premium comparatively.

It is also worth noting that PEP currently has a PEG ratio of 3.43. 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 industry currently had an average PEG ratio of 2.15 as of yesterday's close.

The Beverages - Soft drinks industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 214, putting it in the bottom 17% 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.

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


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