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

In the latest trading session, PepsiCo (PEP) closed at $180.32, marking a +0.58% move from the previous day. This change outpaced the S&P 500's 0.19% gain on the day. Elsewhere, the Dow gained 0.71%, while the tech-heavy Nasdaq lost 0.38%.

Prior to today's trading, shares of the food and beverage company had gained 6.55% over the past month. This has outpaced the Consumer Staples sector's gain of 5.71% and lagged the S&P 500's gain of 11.37% in that time.

Wall Street will be looking for positivity from PepsiCo as it approaches its next earnings report date. In that report, analysts expect PepsiCo to post earnings of $1.84 per share. This would mark year-over-year growth of 2.79%. Our most recent consensus estimate is calling for quarterly revenue of $20.83 billion, up 3.18% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $6.65 per share and revenue of $83.8 billion, which would represent changes of +6.23% and +5.44%, respectively, from the prior year.

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Investors should also note any recent changes to analyst estimates for PepsiCo. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about 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.

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. Within the past 30 days, our consensus EPS projection remained stagnant. PepsiCo is holding a Zacks Rank of #2 (Buy) right now.

Valuation is also important, so investors should note that PepsiCo has a Forward P/E ratio of 26.96 right now. For comparison, its industry has an average Forward P/E of 24.9, which means PepsiCo is trading at a premium to the group.

Investors should also note that PEP has a PEG ratio of 3.52 right now. 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 3.37 as of yesterday's close.

The Beverages - Soft drinks industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 95, putting it in the top 38% 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.

To follow PEP in the coming trading sessions, be sure to utilize Zacks.com.


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