PepsiCo (PEP, $116.00) starts restructuring plan but won't break up the company
After publishing PepsiCo's (PEP) recent fourth quarterly report, the new CEO Ramon Laguarta reiterated he is satisfied with the Company’s product and geographic portfolios and, therefore, has no plans to divest its operations by shedding or acquiring any significant businesses.
However, the company has put into motion a new restructuring program that may lead to an unspecified number of job losses and factories closures over the coming years. This is also expected save billions of dollars in associated costs for the company.
As of today, PEP expects that this program may come at a cost of approx. $2.5 billion in terms of pre-tax restructuring charges through 2023, mostly from severance and other employee costs. In its FY 2018 results, the company allocated $138 million towards these restructuring costs with a further projected expense of $800 million in related charges during the current year.
PEP is optimistic about its future growth anticipating organic revenue to rise 4% this year over last year’s 3.7%. However, core earnings excluding currency fluctuations are expected to fall by approx. 1% due to items including a higher tax rate and investments being made this year. The Company further expects to spend ~$4.5 billion on capex in 2019, a y-o-y increase of more than $1billion.
PEP sees MACD Histogram crosses below signal line
PEP saw its Moving Average Convergence Divergence Histogram (MACD) turn negative on April 04, 2025. This is a bearish signal that suggests the stock could decline going forward. Tickeron's A.I.dvisor looked at 46 instances where the indicator turned negative. In of the 46 cases the stock moved lower in the days that followed. This puts the odds of a downward move at .
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on April 24, 2025. You may want to consider selling the stock, shorting the stock, or exploring put options on PEP as a result. In of 91 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
PEP moved below its 50-day moving average on April 04, 2025 date and that indicates a change from an upward trend to a downward trend.
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 .
The Aroon Indicator for PEP entered a downward trend on May 07, 2025. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
The RSI Oscillator points to a transition from a downward trend to an upward trend -- in cases where PEP's RSI Indicator exited the oversold zone, of 24 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 8 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 344 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 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 Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly undervalued 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 (12.853) is normal, around the industry mean (6.809). P/E Ratio (26.366) is within average values for comparable stocks, (32.900). Projected Growth (PEG Ratio) (2.864) is also within normal values, averaging (5.903). Dividend Yield (0.029) settles around the average of (0.026) among similar stocks. P/S Ratio (2.615) is also within normal values, averaging (3.355).
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating fairly steady price growth. PEP’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. PEP’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 68, placing this stock worse than average.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average 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.
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General Information
a provider of a diversified line of soft drinks and snack foods
Industry BeveragesNonAlcoholic