PepsiCo (PEP) Gains But Lags Market: What You Should Know
In the latest trading session, PepsiCo (PEP) closed at $146.56, marking a +0.78% move from the previous day. This change lagged the S&P 500's 1.4% gain on the day.
Heading into today, shares of the food and beverage company had lost 1.14% over the past month, outpacing the Consumer Staples sector's loss of 1.43% and lagging the S&P 500's gain of 1.07% in that time.
PEP will be looking to display strength as it nears its next earnings release, which is expected to be July 13, 2021. The company is expected to report EPS of $1.51, up 14.39% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $17.86 billion, up 12.03% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $6.05 per share and revenue of $75.43 billion, which would represent changes of +9.6% and +7.18%, respectively, from the prior year.
Any recent changes to analyst estimates for PEP should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
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, 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. Within the past 30 days, our consensus EPS projection remained stagnant. PEP currently has a Zacks Rank of #3 (Hold).
Looking at its valuation, PEP is holding a Forward P/E ratio of 24.04. For comparison, its industry has an average Forward P/E of 22.47, which means PEP is trading at a premium to the group.
It is also worth noting that PEP currently has a PEG ratio of 3.01. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Beverages - Soft drinks was holding an average PEG ratio of 2.47 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 175, putting it in the bottom 32% 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.
Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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