PepsiCo (PEP) closed at $175.94 in the latest trading session, marking a +0.83% move from the prior day. This move lagged the S&P 500's daily gain of 2.13%. Elsewhere, the Dow gained 1.63%, while the tech-heavy Nasdaq added 0.3%.
Coming into today, shares of the food and beverage company had gained 2.95% in the past month. In that same time, the Consumer Staples sector gained 2.57%, while the S&P 500 gained 5.84%.
Investors will be hoping for strength from PepsiCo as it approaches its next earnings release. The company is expected to report EPS of $1.84, up 2.79% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $20.83 billion, up 3.18% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $6.65 per share and revenue of $83.8 billion, which would represent changes of +6.23% and +5.44%, respectively, from the prior year.
Investors might also notice recent changes to analyst estimates for PepsiCo. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.18% higher within the past month. PepsiCo is currently sporting a Zacks Rank of #2 (Buy).
Investors should also note PepsiCo's current valuation metrics, including its Forward P/E ratio of 26.25. For comparison, its industry has an average Forward P/E of 24.36, which means PepsiCo is trading at a premium to the group.
We can also see that PEP currently has a PEG ratio of 3.42. 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. Beverages - Soft drinks stocks are, on average, holding a PEG ratio of 3.3 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 143, putting it in the bottom 44% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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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