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

In the latest trading session, PepsiCo (PEP) closed at $133.59, marking a +0.09% move from the previous day. This change lagged the S&P 500's 0.47% gain on the day. Meanwhile, the Dow gained 0.3%, and the Nasdaq, a tech-heavy index, added 1.05%.

Coming into today, shares of the food and beverage company had gained 5.89% in the past month. In that same time, the Consumer Staples sector gained 1.9%, while the S&P 500 lost 0.08%.

PEP will be looking to display strength as it nears its next earnings release, which is expected to be July 9, 2019. On that day, PEP is projected to report earnings of $1.50 per share, which would represent a year-over-year decline of 6.83%. Our most recent consensus estimate is calling for quarterly revenue of $16.42 billion, up 2.08% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.51 per share and revenue of $66.52 billion. These totals would mark changes of -2.65% and +2.88%, respectively, from last year.

Any recent changes to analyst estimates for PEP should also be noted by investors. 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 0.05% higher within the past month. PEP currently has a Zacks Rank of #2 (Buy).

Looking at its valuation, PEP is holding a Forward P/E ratio of 24.22. This represents a premium compared to its industry's average Forward P/E of 23.62.

Meanwhile, PEP's PEG ratio is currently 3.46. 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. PEP's industry had an average PEG ratio of 2.24 as of yesterday's close.

The Beverages - Soft drinks industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 214, which puts it in the bottom 17% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.

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