PepsiCo, Inc. (PEP), headquartered in Purchase, New York, is a global food and beverage industry leader specializing in a diverse range of snacks, beverages, and nutrition products. With a market cap of $244.08 billion, PEP is a dominant force in the consumer goods sector, offering iconic brands such as Pepsi, Lay's, Gatorade, and Quaker. Competing with other major players like The Coca-Cola Company (KO), PepsiCo drives innovation and growth in the industry, focusing on sustainability, product diversification, and adapting to evolving consumer preferences across global markets.
Companies valued at $200 billion or more are typically classified as "mega-cap" stocks, and PepsiCo falls into this category, underscoring its substantial scale, stability, and influence in the global food and beverage sector. As one of the world's leading consumer goods companies, PepsiCo exemplifies the strength and resilience of a mega-cap company, driven by its diverse portfolio of iconic brands, consistent financial performance, and commitment to innovation and sustainability.
PEP shares are trading 3.2% below their 52-week high of $183.41, which they hit on May 16. PEP has gained 3.7% over the past three months, underperforming the broader S&P 500 Index ($SPX), which has gained 4.7% over the same time frame.
In the longer term, PEP is up 4.5% on a YTD basis, and the shares have gained 1.3% over the past 52 weeks. In comparison, the SPX has gained 15.9% in 2024 and rallied 22.4% over the past year.
However, PEP has been trading below its 50-day moving average since mid-July and its 200-day moving average since early July, which indicates its bullish trend.
On Jul. 11, PepsiCo shares saw a marginal increase, despite posting better-than-expected Q2 earnings, as weaker-than-expected revenue and declining sales volumes in North America weighed on the results. The drop in sales came amid continued price hikes that led customers to cut back on purchases. Moreover, a cautious outlook for organic revenue growth and persistent challenges in key segments like Frito-Lay and Quaker Foods further dampened investor sentiment.
Highlighting the contrast in performance, PEP's competitor, KO, has significantly outperformed the stock and the SPX. KO has gained 23.9% on a YTD basis.
Analysts are moderately optimistic about PEP's prospects despite the weak price performance. The stock has a consensus rating of "Moderate Buy" from 18 analysts in coverage. The mean price target of $186.50 reflects a 5% premium over current levels.
On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
