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PepsiCo (PEP) Gains But Lags Market: What You Should Know

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PepsiCo (PEP - Free Report) closed the most recent trading day at $132.34, moving +0.21% from the previous trading session. This move lagged the S&P 500's daily gain of 0.83%. Meanwhile, the Dow gained 0.93%, and the Nasdaq, a tech-heavy index, added 0.9%.

Heading into today, shares of the food and beverage company had gained 1.01% over the past month, outpacing the Consumer Staples sector's loss of 1.22% and the S&P 500's loss of 2.38% in that time.

PEP will be looking to display strength as it nears its next earnings release, which is expected to be October 3, 2019. On that day, PEP is projected to report earnings of $1.50 per share, which would represent a year-over-year decline of 5.66%. Meanwhile, our latest consensus estimate is calling for revenue of $16.97 billion, up 2.93% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.51 per share and revenue of $66.63 billion, which would represent changes of -2.65% and +3.05%, respectively, from the prior year.

Any recent changes to analyst estimates for PEP should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-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. 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.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. PEP currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that PEP has a Forward P/E ratio of 23.96 right now. This valuation marks a premium compared to its industry's average Forward P/E of 22.86.

Meanwhile, PEP's PEG ratio is currently 3.43. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Beverages - Soft drinks was holding an average PEG ratio of 2.7 at yesterday's closing price.

The Beverages - Soft drinks industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 112, putting it in the top 44% 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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