PepsiCo (NASDAQ:PEP) Shares Down 2.2% - What's Next?

Key Points

• PepsiCo shares fell 2.2% to $137.27 in Tuesday trading, on volume slightly above average.
• The company beat quarterly earnings and revenue estimates: EPS was $2.34 versus $2.29 expected, while revenue rose 5.6% year over year to $25.27 billion.
• Analysts’ consensus rating is Hold, with an average price target of $143.28. PepsiCo also expanded its long-term Taco Bell beverage partnership, including plans for new functional and energy drinks.

PepsiCo, Inc. (NASDAQ:PEP - Get Free Report)'s stock price traded down 2.2% during mid-day trading on Tuesday. The company traded as low as $137.09 and last traded at $137.27. 8,377,886 shares traded hands during trading, an increase of 2% from the average session volume of 8,187,028 shares. The stock had previously closed at $140.42.

More PepsiCo News

Here are the key news stories impacting PepsiCo this week:

• Positive Sentiment: PepsiCo renewed and expanded its long-term beverage partnership with Taco Bell, retaining exclusive beverage-partner status and widening distribution in the U.S. and internationally. Plans include new functional and energy drink offerings, which could provide additional reach for its brands. What Is PepsiCo (PEP) Gaining From Its Expanded Beverage Partnership?
• Positive Sentiment: PepsiCo ranked among hedge funds’ most undervalued dividend-growth stocks, placing 10th on the cited list; 68 tracked funds held bullish positions. That investor interest may support sentiment toward PEP as an income-oriented stock. PepsiCo Remains a Popular Choice for Dividend Investors
• Neutral Sentiment: Coverage of PepsiCo’s functional-food strategy points to a potential area of strategic development, but the headline provides no details on expected sales, investments, or financial impact. Inside PepsiCo’s functional food strategy
• Neutral Sentiment: Costco has brought back a rare seasonal PepsiCo soda that fans reportedly stockpile. The return could help seasonal demand and product visibility, though the article gives no indication of a material effect on companywide results. Costco just brought back the rare PepsiCo seasonal soda fans stockpile for emergencies
• Negative Sentiment: A comparison asks how Coca-Cola’s stock moved ahead of PepsiCo’s, putting PEP’s relative performance in focus. Continued underperformance versus its main beverage rival could weigh on investor sentiment. How Did Coca-Cola Stock Leave PepsiCo Behind?

Wall Street Analyst Weigh In

A number of brokerages recently weighed in on PEP. Weiss Ratings cut shares of PepsiCo from a "hold (c)" rating to a "hold (c-)" rating in a report on Thursday, September 24th. The Goldman Sachs Group reiterated a "buy" rating and set a $165.00 target price on shares of PepsiCo in a report on Thursday, October 8th. Freedom Broker raised PepsiCo from a "hold" rating to a "strong-buy" rating in a research report on Saturday, October 10th. BNP Paribas Exane reduced their price objective on PepsiCo from $161.00 to $157.00 and set an "outperform" rating on the stock in a research note on Friday, October 9th. Finally, Jefferies Financial Group reiterated a "hold" rating on shares of PepsiCo in a report on Thursday, October 8th. One equities research analyst has rated the stock with a Strong Buy rating, four have issued a Buy rating, fourteen have assigned a Hold rating and one has issued a Sell rating to the company's stock. Based on data from MarketBeat.com, the company currently has a consensus rating of "Hold" and an average price target of $143.28.

PepsiCo Trading Down 2.2%

The firm has a market capitalization of $187.06 billion, a PE ratio of 17.24, a PEG ratio of 3.96 and a beta of 0.35. The company's 50-day moving average price is $133.43 and its 200-day moving average price is $145.86. The company has a debt-to-equity ratio of 1.90, a quick ratio of 0.76 and a current ratio of 0.94.

PepsiCo (NASDAQ:PEP - Get Free Report) last posted its earnings results on Wednesday, October 7th. The company reported $2.34 EPS for the quarter, beating the consensus estimate of $2.29 by $0.05. PepsiCo had a return on equity of 53.08% and a net margin of 11.09%. The firm had revenue of $25.27 billion for the quarter, compared to analyst estimates of $24.95 billion. During the same quarter in the prior year, the company posted $2.29 earnings per share. PepsiCo's revenue for the quarter was up 5.6% compared to the same quarter last year. On average, sell-side analysts expect that PepsiCo, Inc. will post 8.39 earnings per share for the current year.

Insider Transactions at PepsiCo

In related news, CEO Ramon Laguarta sold 30,000 shares of the company's stock in a transaction that occurred on Wednesday, October 21st. The stock was sold at an average price of $135.13, for a total value of $4,053,900.00. Following the completion of the transaction, the chief executive officer directly owned 491,645 shares of the company's stock, valued at $66,435,988.85. This represents a 5.75% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, Director Robert C. Pohlad purchased 184,646 shares of the company's stock in a transaction on Wednesday, October 14th. The stock was bought at an average price of $128.28 per share, for a total transaction of $23,686,388.88. Following the completion of the purchase, the director directly owned 433,009 shares of the company's stock, valued at $55,546,394.52. The trade was a 74.35% increase in their ownership of the stock. Additional details regarding this purchase are available in the official SEC disclosure. Corporate insiders own 0.12% of the company's stock.

Institutional Inflows and Outflows

Several large investors have recently modified their holdings of the stock. Evergreen Advisors LLC purchased a new position in shares of PepsiCo during the first quarter worth about $25,000. Montgomery Financial Services LLC purchased a new stake in shares of PepsiCo in the 2nd quarter valued at about $25,000. Next Level Wealth Planning LLC purchased a new stake in shares of PepsiCo in the 3rd quarter valued at about $26,000. Atlatl Advisers LLC acquired a new stake in shares of PepsiCo in the 2nd quarter valued at about $31,000. Finally, Osterweis Capital Management Inc. acquired a new stake in shares of PepsiCo in the 2nd quarter valued at about $31,000. Institutional investors and hedge funds own 73.07% of the company's stock.

About PepsiCo

PepsiCo, Inc NASDAQ: PEP is a global food and beverage company whose portfolio includes Pepsi-Cola, Mountain Dew, Gatorade, Lay's, Doritos, Cheetos, Quaker, Tostitos, Fritos, and SodaStream. Its products span carbonated soft drinks, sports and energy beverages, bottled water, juices, convenient foods, snacks, and other packaged food offerings.

The company sells products through retail stores, restaurants, food-service providers, e-commerce platforms, and other distribution channels. PepsiCo serves consumers in North America and international markets across Latin America, Europe, Africa, the Middle East, and Asia-Pacific.

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