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

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a day ago

The most recent trading session ended with PepsiCo (PEP) standing at $129.94, reflecting a -1.44% shift from the previous trading day's closing. This move lagged the S&P 500's daily loss of 0.27%.
The stock of food and beverage company has risen by 1.17% in the past month, lagging the Consumer Staples sector's gain of 1.96% and the S&P 500's gain of 6.9%.
The upcoming earnings release of PepsiCo will be of great interest to investors. The company's earnings report is expected on July 17, 2025. On that day, PepsiCo is projected to report earnings of $2.04 per share, which would represent a year-over-year decline of 10.53%. At the same time, our most recent consensus estimate is projecting a revenue of $22.37 billion, reflecting a 0.6% fall from the equivalent quarter last year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $7.87 per share and a revenue of $92.2 billion, representing changes of -3.55% and +0.38%, respectively, from the prior 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.
Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.18% lower. PepsiCo presently features a Zacks Rank of #4 (Sell).
In the context of valuation, PepsiCo is at present trading with a Forward P/E ratio of 16.75. Its industry sports an average Forward P/E of 19.23, so one might conclude that PepsiCo is trading at a discount comparatively.
Investors should also note that PEP has a PEG ratio of 3.79 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 had an average PEG ratio of 2.56 as trading concluded yesterday.
The Beverages - Soft drinks industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 61, which puts it in the top 25% of all 250+ industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.
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This article originally published on Zacks Investment Research (zacks.com).
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