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.
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.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
