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's RSI Oscillator ascending out of oversold territory
The RSI Oscillator for PEP moved out of oversold territory on May 31, 2023. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 16 similar instances when the indicator left oversold territory. In of the 16 cases the stock moved higher. This puts the odds of a move higher at .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 10 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 348 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 367 cases where PEP Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
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 .
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.
The 10-day moving average for PEP crossed bearishly below the 50-day moving average on June 01, 2023. This indicates that the trend has shifted lower and could be considered a sell signal. In of 16 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
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 .
Fundamental Analysis (Ratings)
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 71, 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 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 (14.881) is normal, around the industry mean (59.191). P/E Ratio (38.610) is within average values for comparable stocks, (49.908). Projected Growth (PEG Ratio) (3.176) is also within normal values, averaging (5.368). Dividend Yield (0.026) settles around the average of (0.030) among similar stocks. P/S Ratio (2.896) is also within normal values, averaging (2.808).
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.
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is fair valued 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.
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Industry description
Market Cap
High and low price notable news
Volume
Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
General Information
a provider of a diversified line of soft drinks and snack foods
Industry BeveragesNonAlcoholic
PEP and
Correlation & Price change
A.I.dvisor indicates that over the last year, PEP has been closely correlated with KO. These tickers have moved in lockstep 81% of the time. This A.I.-generated data suggests there is a high statistical probability that if PEP jumps, then KO could also see price increases.
| Ticker / NAME | Correlation To PEP | 1D Price Change % | ||
|---|---|---|---|---|
| PEP | 100% | +1.03% | ||
| KO - PEP | 81% Closely correlated | +1.93% | ||
| KDP - PEP | 67% Closely correlated | +0.90% | ||
| MNST - PEP | 60% Loosely correlated | +0.20% | ||
| CCEP - PEP | 56% Loosely correlated | +1.24% | ||
| FIZZ - PEP | 55% Loosely correlated | +1.46% | ||
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