Abhoy Sarkar's Avatar
published in Blogs
Feb 15, 2019

Pepsi (PEP, $112.59) meets Q4 expectations, but warns of challenges in 2019

While being able to match analysts’ expectation for the latest quarter’s earnings and revenue, PepsiCo. portends earnings challenges for 2019.

The soft drink behemoth reported fourth quarter earnings of  $1.49 per share and revenue of $19.52 billion  - both in line with what Wall Street estimated.  

Pepsi’s North American beverage market increased +2% - thereby rewarding the company’s advertising investment in the region. The company’s snack business  registered +4% organic revenue growth in North America for the quarter. 

PepsiCo.’s fiscal fourth-quarter net income came in at $6.85 billion (or $4.83 per share), compared to a loss of -$710 million, (or -50 cents per share) of the year-ago quarter.  

However, Pepsi has apparently lowered its hopes for full-year 2019 earnings, owing to currency exchange rates headwinds, increased advertising/marketing expenses, and an expected hike in the effective tax rate to 21 percent from 18.8 percent. It now predicts earnings of $5.50 per share during 2019, down from its 2018 earnings of $5.66 per share. Wall Street had expected earnings of $5.86 a share for 2019 (according to Refinitiv).

But what might be good news for the company’s shareholders is that it announced a +3% dividend increase -  to $3.82 from $3.71 - starting June.

Related Ticker: PEP

PEP in downward trend: price dove below 50-day moving average on May 24, 2023

PEP moved below its 50-day moving average on May 24, 2023 date and that indicates a change from an upward trend to a downward trend. In of 37 similar past instances, the stock price decreased further within the following month. The odds of a continued downward trend are .

Price Prediction Chart

Technical Analysis (Indicators)

Bearish Trend Analysis

The Momentum Indicator moved below the 0 level on May 17, 2023. You may want to consider selling the stock, shorting the stock, or exploring put options on PEP as a result. In of 98 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .

The Moving Average Convergence Divergence Histogram (MACD) for PEP turned negative on May 16, 2023. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 46 similar instances when the indicator turned negative. In of the 46 cases the stock turned lower in the days that followed. This puts the odds of success at .

Following a 3-day decline, the stock is projected to fall further. Considering past instances where PEP declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .

Bullish Trend Analysis

The RSI Indicator shows that the ticker has stayed in the oversold zone for 3 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an Uptrend is expected.

The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 6 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.

Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where PEP advanced for three days, in of 347 cases, the price rose further within the following month. The odds of a continued upward trend are .

PEP may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.

The Aroon Indicator entered an Uptrend today. In of 371 cases where PEP Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .

Fundamental Analysis (Ratings)

Fear & Greed

The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 70, placing this stock better than average.

The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.

The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (14.837) is normal, around the industry mean (58.892). P/E Ratio (38.610) is within average values for comparable stocks, (49.862). Projected Growth (PEG Ratio) (3.168) is also within normal values, averaging (5.362). Dividend Yield (0.025) settles around the average of (0.030) among similar stocks. P/S Ratio (2.889) is also within normal values, averaging (2.835).

The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. PEP’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.

Notable companies

The most notable companies in this group are Coca-Cola Company (NYSE:KO), PepsiCo (NASDAQ:PEP).

Industry description

Non-alcoholic drinks include traces of alcohol or low alcohol content or without alcohol or alcohol removed. Functional Beverages, Carbonated Soft Drinks (CSDs), Sports Drinks, Fruit Beverages, and Bottled Water are some common types of non-alcoholic beverages. The largest segment in this market is soft drinks (think Pepsi and Coke). Many established companies in this space have also been stepping up production of low to zero-calorie varieties in recent years, to cater to a rising number of health-conscious consumers. Coca-Cola Company, Pepsico Inc, Keurig Dr Pepper Inc. and Monster Beverage Corporation are some major non-alcoholic beverage makers.

Market Cap

The average market capitalization across the Beverages: Non-Alcoholic Industry is 20.81B. The market cap for tickers in the group ranges from 1.77K to 260.6B. KO holds the highest valuation in this group at 260.6B. The lowest valued company is BVNNF at 1.77K.

High and low price notable news

The average weekly price growth across all stocks in the Beverages: Non-Alcoholic Industry was -0%. For the same Industry, the average monthly price growth was 2%, and the average quarterly price growth was 8%. WTER experienced the highest price growth at 53%, while FLWBF experienced the biggest fall at -12%.

Volume

The average weekly volume growth across all stocks in the Beverages: Non-Alcoholic Industry was 13%. For the same stocks of the Industry, the average monthly volume growth was 19% and the average quarterly volume growth was 142%

Fundamental Analysis Ratings

The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows

Valuation Rating: 54
P/E Growth Rating: 60
Price Growth Rating: 53
SMR Rating: 65
Profit Risk Rating: 69
Seasonality Score: 34 (-100 ... +100)
Related Portfolios: CONSUMER STAPLES ETFs
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