This story originally appeared on Zacks
In the latest trading session, PepsiCo (PEP) closed at $172.97, marking a +0.35% move from the previous day. This move outpaced the S&P 500’s daily gain of 0.14%. At the same time, the Dow added 0.25%, and the tech-heavy Nasdaq lost 0.34%.
Prior to today’s trading, shares of the food and beverage company had gained 7.87% over the past month. This has outpaced the Consumer Staples sector’s gain of 6.38% and the S&P 500’s gain of 4.32% in that time.
PepsiCo will be looking to display strength as it nears its next earnings release, which is expected to be February 10, 2022. On that day, PepsiCo is projected to report earnings of $1.52 per share, which would represent year-over-year growth of 3.4%. Our most recent consensus estimate is calling for quarterly revenue of $24.32 billion, up 8.29% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $6.25 per share and revenue of $78.54 billion, which would represent changes of +13.22% and +11.6%, respectively, from the prior year.
Any recent changes to analyst estimates for PepsiCo should also be noted by investors. 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.
Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. PepsiCo is currently a Zacks Rank #3 (Hold).
Digging into valuation, PepsiCo currently has a Forward P/E ratio of 27.59. Its industry sports an average Forward P/E of 23.65, so we one might conclude that PepsiCo is trading at a premium comparatively.
Also, we should mention that PEP has a PEG ratio of 3.15. 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 industry currently had an average PEG ratio of 2.48 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 193, which puts it in the bottom 25% 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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