In the latest trading session, PepsiCo (PEP) closed at $135.86, marking a -0.4% move from the previous day. This change lagged the S&P 500's daily gain of 0.03%. Meanwhile, the Dow gained 0.28%, and the Nasdaq, a tech-heavy index, lost 0.04%.
Prior to today's trading, shares of the food and beverage company had gained 6.27% over the past month. This has outpaced the Consumer Staples sector's gain of 1.41% and the S&P 500's gain of 2.25% in that time.
Investors will be hoping for strength from PEP as it approaches its next earnings release, which is expected to be October 3, 2019. In that report, analysts expect PEP to post earnings of $1.50 per share. This would mark a year-over-year decline of 5.66%. Meanwhile, our latest consensus estimate is calling for revenue of $16.97 billion, up 2.93% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.51 per share and revenue of $66.63 billion. These totals would mark changes of -2.65% and +3.05%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for PEP. 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.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. PEP is currently sporting a Zacks Rank of #3 (Hold).
Looking at its valuation, PEP is holding a Forward P/E ratio of 24.75. This valuation marks a premium compared to its industry's average Forward P/E of 22.39.
It is also worth noting that PEP currently has a PEG ratio of 3.54. 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. The Beverages - Soft drinks was holding an average PEG ratio of 2.79 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 191, which puts it in the bottom 26% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.
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