PepsiCo (PEP) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

PepsiCo (PEP) closed the most recent trading day at $145.06, moving +0.45% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.35%. At the same time, the Dow added 0.23%, and the tech-heavy Nasdaq gained 0.26%.

Heading into today, shares of the food and beverage company had gained 0.17% over the past month, lagging the Consumer Staples sector's gain of 3.34% and the S&P 500's gain of 3.27% in that time.

PEP will be looking to display strength as it nears its next earnings release, which is expected to be February 11, 2021. In that report, analysts expect PEP to post earnings of $1.45 per share. This would mark no growth from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $21.94 billion, up 6.3% from the prior-year quarter.

PEP's full-year Zacks Consensus Estimates are calling for earnings of $5.51 per share and revenue of $69.87 billion. These results would represent year-over-year changes of -0.36% and +4.03%, respectively.

Investors might also notice recent changes to analyst estimates for PEP. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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. Within the past 30 days, our consensus EPS projection has moved 0.02% higher. PEP currently has a Zacks Rank of #3 (Hold).

Investors should also note PEP's current valuation metrics, including its Forward P/E ratio of 26.21. This represents a premium compared to its industry's average Forward P/E of 24.22.

Meanwhile, PEP's PEG ratio is currently 4.04. 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. The Beverages - Soft drinks was holding an average PEG ratio of 4.2 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 222, which puts it in the bottom 13% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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