PepsiCo (PEP) Rating Increased to Hold at Zacks Investment Research

Zacks Investment Research upgraded shares of PepsiCo (NASDAQ:PEP) from a sell rating to a hold rating in a research note published on Thursday morning.

According to Zacks, “PepsiCo's shares have outperformed the industry in the past three months. The company posted impressive third-quarter 2018 results, which marked 11th straight earnings beat. Also, sales outpaced estimates in five of the last seven quarters. Further, strong performances in the company’s international division, propelled by higher revenue growth in developing and emerging markets are encouraging. However, PepsiCo is witnessing strained margins for quite some time due to operating and commodity cost inflation, including higher transportation costs and stepped-up advertising expense. This trend is likely to continue through the rest of 2018. Additionally, consumers’ awareness on health and wellness, alongside new taxes on sugar-sweetened beverages and growing regulatory pressures are affecting CSD sales, which has caused sluggishness in beverage category. Further, unfavorable foreign exchange rates are headwinds.”

Several other brokerages have also recently issued reports on PEP. BidaskClub upgraded PepsiCo from a hold rating to a buy rating in a research note on Thursday, November 15th. Morgan Stanley decreased their target price on PepsiCo from $127.00 to $125.00 and set a buy rating for the company in a research note on Thursday, October 4th. Deutsche Bank decreased their target price on PepsiCo from $118.00 to $116.00 and set a hold rating for the company in a research note on Wednesday, October 3rd. Goldman Sachs Group restated a sell rating and set a $108.00 target price on shares of PepsiCo in a research note on Monday, August 20th. Finally, Citigroup decreased their target price on PepsiCo from $118.00 to $116.00 and set a hold rating for the company in a research note on Wednesday, October 3rd. One research analyst has rated the stock with a sell rating, fourteen have assigned a hold rating and six have assigned a buy rating to the company’s stock. PepsiCo has a consensus rating of Hold and an average price target of $117.89.

Shares of PEP opened at $115.41 on Thursday. The company has a debt-to-equity ratio of 2.95, a current ratio of 1.31 and a quick ratio of 1.15. The stock has a market capitalization of $162.91 billion, a PE ratio of 21.10, a P/E/G ratio of 2.89 and a beta of 0.58. PepsiCo has a 1 year low of $95.94 and a 1 year high of $122.51.

PepsiCo (NASDAQ:PEP) last announced its quarterly earnings data on Tuesday, October 2nd. The company reported $1.59 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.57 by $0.02. The business had revenue of $16.49 billion during the quarter, compared to analysts’ expectations of $16.38 billion. PepsiCo had a return on equity of 73.27% and a net margin of 7.66%. The business’s quarterly revenue was up 1.5% compared to the same quarter last year. During the same quarter last year, the business posted $1.48 EPS. As a group, sell-side analysts expect that PepsiCo will post 5.65 EPS for the current year.

The company also recently declared a quarterly dividend, which will be paid on Monday, January 7th. Shareholders of record on Friday, December 7th will be given a dividend of $0.9275 per share. This represents a $3.71 annualized dividend and a yield of 3.21%. The ex-dividend date is Thursday, December 6th. PepsiCo’s dividend payout ratio (DPR) is 70.94%.

In other PepsiCo news, CEO Mike Spanos sold 20,074 shares of PepsiCo stock in a transaction that occurred on Wednesday, October 31st. The stock was sold at an average price of $112.42, for a total transaction of $2,256,719.08. Following the transaction, the chief executive officer now owns 35,520 shares of the company’s stock, valued at $3,993,158.40. The transaction was disclosed in a filing with the SEC, which is available at this link. Also, CEO Laxman Narasimhan sold 5,500 shares of PepsiCo stock in a transaction that occurred on Thursday, October 4th. The stock was sold at an average price of $106.79, for a total value of $587,345.00. Following the transaction, the chief executive officer now directly owns 130,135 shares in the company, valued at approximately $13,897,116.65. The disclosure for this sale can be found here. In the last ninety days, insiders have sold 205,893 shares of company stock worth $22,663,157. 0.27% of the stock is currently owned by corporate insiders.

Institutional investors and hedge funds have recently added to or reduced their stakes in the business. Mainstay Capital Management LLC ADV increased its holdings in shares of PepsiCo by 10,787.0% in the second quarter. Mainstay Capital Management LLC ADV now owns 10,887 shares of the company’s stock valued at $100,000 after purchasing an additional 10,787 shares during the period. Prime Capital Investment Advisors LLC increased its holdings in shares of PepsiCo by 351.5% in the third quarter. Prime Capital Investment Advisors LLC now owns 903 shares of the company’s stock valued at $101,000 after purchasing an additional 703 shares during the period. WP Advisors LLC acquired a new position in shares of PepsiCo in the second quarter valued at approximately $118,000. WealthTrust Arizona LLC increased its holdings in shares of PepsiCo by 268.7% in the third quarter. WealthTrust Arizona LLC now owns 1,106 shares of the company’s stock valued at $124,000 after purchasing an additional 806 shares during the period. Finally, Fort L.P. acquired a new position in shares of PepsiCo in the second quarter valued at approximately $125,000. 70.25% of the stock is currently owned by institutional investors.

PepsiCo Company Profile

PepsiCo, Inc operates as a food and beverage company worldwide. Its Frito-Lay North America segment offers Lay's and Ruffles potato chips; Doritos, Tostitos, and Santitas tortilla chips; and Cheetos snacks, branded dips, and Fritos corn chips. The company's Quaker Foods North America segment provides cereals, rice, pasta, mixes and syrups, granola bars, grits, oat squares, oatmeal, rice cakes, simply granola, and side dishes under the brands Quaker, Aunt Jemima, Cap'n crunch, life, Quaker Chewy, and Rice-A-Roni.

Further Reading: Average Daily Trade Volume – ADTV

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