Here's Why PepsiCo (PEP) Fell More Than Broader Market

The investment community will be closely monitoring the performance of PepsiCo in its forthcoming earnings report. In that report, analysts expect PepsiCo to post earnings of $2.31 per share. This would mark year-over-year growth of 0.87%. Alongside, our most recent consensus estimate is anticipating revenue of $24.92 billion, indicating a 4.1% upward movement from the same quarter last year.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $8.57 per share and a revenue of $98.97 billion, signifying shifts of +5.28% and +5.37%, respectively, from the last year.

Investors should also pay attention to any latest changes in analyst estimates for PepsiCo. Recent revisions tend to reflect the latest near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

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, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, there's been a 0.04% fall in the Zacks Consensus EPS estimate. Currently, PepsiCo is carrying a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that PepsiCo has a Forward P/E ratio of 16.42 right now. Its industry sports an average Forward P/E of 19.72, so one might conclude that PepsiCo is trading at a discount comparatively.

It's also important to note that PEP currently trades at a PEG ratio of 3.09. 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 average PEG ratio for the Beverages - Soft drinks industry stood at 1.5 at the close of the market yesterday.

The Beverages - Soft drinks industry is part of the Consumer Staples sector. Currently, this industry holds a Zacks Industry Rank of 93, positioning it in the top 38% of all 250+ industries.

The Zacks Industry Rank is ordered 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.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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