Zacks Equity Research
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PepsiCo (PEP) closed the most recent trading day at $131.92, moving +0.96% from the previous trading session. The stock’s change was more than the S&P 500’s daily gain of 0.4%. Meanwhile, the Dow gained 0.28%, and the Nasdaq, a tech-heavy index, added 0.39%.
Heading into today, shares of the food and beverage company had lost 3.62% over the past month, lagging the Consumer Staples sector’s gain of 1.13% and the S&P 500’s gain of 6.69% in that time.
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The upcoming earnings release of PepsiCo will be of great interest to investors. On that day, PepsiCo is projected to report earnings of $2.04 per share, which would represent a year-over-year decline of 10.53%. In the meantime, our current consensus estimate forecasts the revenue to be $22.37 billion, indicating a 0.6% decline compared to the corresponding quarter of the prior year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $7.87 per share and revenue of $92.2 billion, which would represent changes of -3.55% and +0.38%, respectively, from the prior year.
Investors should also take note of any recent adjustments to analyst estimates for PepsiCo. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, upbeat changes in estimates indicate analysts’ favorable outlook on the company’s business health and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To capitalize on this, we’ve crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, there’s been a 0.18% fall in the Zacks Consensus EPS estimate. As of now, PepsiCo holds a Zacks Rank of #4 (Sell).
Investors should also note PepsiCo’s current valuation metrics, including its Forward P/E ratio of 16.6. This expresses a discount compared to the average Forward P/E of 20.15 of its industry.
Also, we should mention that PEP has a PEG ratio of 3.75. 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. Beverages – Soft drinks stocks are, on average, holding a PEG ratio of 2.54 based on yesterday’s closing prices.
The Beverages – Soft drinks industry is part of the Consumer Staples sector. Currently, this industry holds a Zacks Industry Rank of 50, positioning it in the top 21% of all 250+ industries.
