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PepsiCo (PEP) Rises But Trails Market: What Investors Should Know

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PepsiCo (PEP - Free Report) ended the recent trading session at $168.88, demonstrating a +0.7% swing from the preceding day's closing price. This change lagged the S&P 500's 0.81% gain on the day. Meanwhile, the Dow experienced a rise of 0.39%, and the technology-dominated Nasdaq saw an increase of 1.35%.

Prior to today's trading, shares of the food and beverage company had lost 3.71% over the past month. This has was narrower than the Consumer Staples sector's loss of 6.92% and the S&P 500's loss of 6.19% in that time.

The investment community will be closely monitoring the performance of PepsiCo in its forthcoming earnings report. The company is scheduled to release its earnings on October 10, 2023. The company's upcoming EPS is projected at $2.17, signifying a 10.15% increase compared to the same quarter of the previous year. Our most recent consensus estimate is calling for quarterly revenue of $23.42 billion, up 6.59% from the year-ago period.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $7.48 per share and revenue of $92.1 billion, indicating changes of +10.16% and +6.61%, respectively, compared to the previous year.

Investors should also pay attention to any latest changes in analyst estimates for PepsiCo. These recent revisions tend to reflect the evolving nature of short-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

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.

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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Currently, PepsiCo is carrying a Zacks Rank of #4 (Sell).

Looking at valuation, PepsiCo is presently trading at a Forward P/E ratio of 22.41. Its industry sports an average Forward P/E of 20.47, so one might conclude that PepsiCo is trading at a premium comparatively.

It's also important to note that PEP currently trades at a PEG ratio of 2.69. 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 2.32 based on yesterday's closing prices.

The Beverages - Soft drinks industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 96, which puts it in the top 39% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.


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