PepsiCo (PEP) Gains But Lags Market: What You Should Know
In the latest trading session, PepsiCo (PEP) closed at $180.67, marking a +0.69% move from the previous day. This change lagged the S&P 500's 1.42% gain on the day. Meanwhile, the Dow gained 1%, and the Nasdaq, a tech-heavy index, added 5.16%.
Coming into today, shares of the food and beverage company had gained 3.4% in the past month. In that same time, the Consumer Staples sector gained 1.24%, while the S&P 500 gained 0.27%.
PepsiCo will be looking to display strength as it nears its next earnings release, which is expected to be April 25, 2023. In that report, analysts expect PepsiCo to post earnings of $1.37 per share. This would mark year-over-year growth of 6.2%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $17.18 billion, up 6.05% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.23 per share and revenue of $89.48 billion. These totals would mark changes of +6.48% and +3.58%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for PepsiCo. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. PepsiCo is currently a Zacks Rank #3 (Hold).
Valuation is also important, so investors should note that PepsiCo has a Forward P/E ratio of 24.83 right now. This valuation marks a premium compared to its industry's average Forward P/E of 23.64.
Also, we should mention that PEP has a PEG ratio of 3.25. 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. Beverages - Soft drinks stocks are, on average, holding a PEG ratio of 2.94 based on yesterday's closing prices.
The Beverages - Soft drinks industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 75, putting it in the top 30% 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.
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