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

In the latest trading session, PepsiCo (PEP) closed at $132.06, marking a -0.35% move from the previous day. This change lagged the S&P 500's 0.97% gain on the day. At the same time, the Dow added 1.35%, and the tech-heavy Nasdaq gained 1.39%.

Prior to today's trading, shares of the food and beverage company had gained 1.95% over the past month. This has outpaced the Consumer Staples sector's gain of 1.05% and the S&P 500's gain of 0.64% in that time.

Investors will be hoping for strength from PEP as it approaches 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, our latest consensus estimate is calling for revenue of $16.42 billion, up 2.08% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.51 per share and revenue of $66.52 billion. These totals would mark changes of -2.65% and +2.88%, respectively, from last 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. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. PEP is currently sporting a Zacks Rank of #2 (Buy).

Digging into valuation, PEP currently has a Forward P/E ratio of 24.05. This represents a no noticeable deviation compared to its industry's average Forward P/E of 24.05.

Also, we should mention that PEP has a PEG ratio of 3.44. 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 industry currently had an average PEG ratio of 2.23 as of yesterday's close.

The Beverages - Soft drinks industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 215, which puts 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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