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

In the latest trading session, PepsiCo (PEP) closed at $150.88, marking a +0.31% move from the previous day.

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This story originally appeared on Zacks

PepsiCo (PEP) closed at $150.88 in the latest trading session, marking a +0.31% move from the prior day. This move lagged the S&P 500's daily gain of 1.15%.

- Zacks

Coming into today, shares of the food and beverage company had lost 4.17% in the past month. In that same time, the Consumer Staples sector lost 4.16%, while the S&P 500 lost 4.67%.

Wall Street will be looking for positivity from PEP as it approaches its next earnings report date. This is expected to be October 5, 2021. In that report, analysts expect PEP to post earnings of $1.53 per share. This would mark a year-over-year decline of 7.83%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $19.44 billion, up 7.46% from the year-ago period.

PEP's full-year Zacks Consensus Estimates are calling for earnings of $6.24 per share and revenue of $77.34 billion. These results would represent year-over-year changes of +13.04% and +9.91%, respectively.

Investors might also notice recent changes to analyst estimates for PEP. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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. The Zacks Consensus EPS estimate has moved 0.08% higher within the past month. PEP is currently a Zacks Rank #3 (Hold).

Investors should also note PEP's current valuation metrics, including its Forward P/E ratio of 24.1. For comparison, its industry has an average Forward P/E of 22.36, which means PEP is trading at a premium to the group.

Meanwhile, PEP's PEG ratio is currently 2.83. 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 2.3 at yesterday's closing price.

The Beverages - Soft drinks industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 108, which puts it in the top 43% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks 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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