PepsiCo (PEP) Lowered to Sell at Zacks Investment Research

Zacks Investment Research cut shares of PepsiCo (NASDAQ:PEP) from a hold rating to a sell rating in a report released on Thursday, Zacks.com reports.

According to Zacks, “Although PepsiCo outpaced the industry in the past year, owing to robust surprise trend, investors continue to remain wary of the soft earnings view for 2019. Unfavorable impacts of ongoing investments to strengthen business, higher tax rate, and the absence of asset sale and refranchising gains that occurred in 2018 are likely to weigh on PepsiCo’s earnings in 2019. Consequently, it estimates core constant-currency EPS to decline nearly 1% and reported EPS to be down 3% in 2019. Further, adverse currency rates are likely to hurt the company’s top and bottom lines in 2019. However, PepsiCo reported earnings and sales beat in first-quarter 2019, driven by strong gains in international and FLNA segments. With this, it reported sales beat in seven of the last eight quarters and positive earnings surprise in 12 of the last 13 quarters. The company’s productivity savings goal of at least $1 billion annually through 2023 also bodes well.”

A number of other analysts also recently commented on PEP. BidaskClub downgraded shares of PepsiCo from a buy rating to a hold rating in a research report on Tuesday, April 9th. Royal Bank of Canada restated a neutral rating and set a $115.00 price target on shares of PepsiCo in a research report on Thursday. Bank of America boosted their price target on shares of PepsiCo from $130.00 to $135.00 and gave the stock a buy rating in a research report on Thursday. Deutsche Bank boosted their price target on shares of PepsiCo from $120.00 to $131.00 and gave the stock a hold rating in a research report on Thursday. Finally, Argus restated a buy rating on shares of PepsiCo in a research report on Thursday. Two analysts have rated the stock with a sell rating, thirteen have given a hold rating and nine have assigned a buy rating to the company. The company currently has a consensus rating of Hold and a consensus price target of $123.00.

Shares of NASDAQ:PEP opened at $127.09 on Thursday. The stock has a market capitalization of $178.16 billion, a P/E ratio of 22.45, a PEG ratio of 3.12 and a beta of 0.65. PepsiCo has a fifty-two week low of $95.94 and a fifty-two week high of $128.26. The company has a debt-to-equity ratio of 1.99, a quick ratio of 0.85 and a current ratio of 0.94.

PepsiCo (NASDAQ:PEP) last issued its quarterly earnings data on Wednesday, April 17th. The company reported $0.97 earnings per share for the quarter, beating the Thomson Reuters’ consensus estimate of $0.92 by $0.05. The firm had revenue of $12.88 billion for the quarter, compared to the consensus estimate of $12.68 billion. PepsiCo had a net margin of 19.37% and a return on equity of 65.12%. PepsiCo’s quarterly revenue was up 2.6% compared to the same quarter last year. During the same period last year, the firm posted $0.96 EPS. On average, research analysts expect that PepsiCo will post 5.51 earnings per share for the current fiscal year.

The firm also recently disclosed a quarterly dividend, which was paid on Friday, March 29th. Stockholders of record on Friday, March 1st were paid a $0.9275 dividend. The ex-dividend date of this dividend was Thursday, February 28th. This represents a $3.71 annualized dividend and a dividend yield of 2.92%. PepsiCo’s dividend payout ratio is currently 65.55%.

In other news, CEO Vivek Sankaran sold 13,000 shares of PepsiCo stock in a transaction that occurred on Thursday, March 7th. The shares were sold at an average price of $117.28, for a total value of $1,524,640.00. Following the transaction, the chief executive officer now owns 90,379 shares of the company’s stock, valued at approximately $10,599,649.12. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through the SEC website. Insiders own 0.28% of the company’s stock.

Institutional investors and hedge funds have recently made changes to their positions in the company. Financial Gravity Wealth Inc. purchased a new position in shares of PepsiCo in the first quarter worth approximately $41,000. Watch Point Trust Co increased its position in shares of PepsiCo by 9.6% in the first quarter. Watch Point Trust Co now owns 24,796 shares of the company’s stock worth $3,039,000 after acquiring an additional 2,165 shares in the last quarter. Isthmus Partners LLC purchased a new position in shares of PepsiCo in the first quarter worth approximately $928,000. Cypress Wealth Services LLC increased its position in shares of PepsiCo by 8.6% in the first quarter. Cypress Wealth Services LLC now owns 22,627 shares of the company’s stock worth $2,773,000 after acquiring an additional 1,792 shares in the last quarter. Finally, Plimoth Trust Co. LLC increased its position in shares of PepsiCo by 18.5% in the first quarter. Plimoth Trust Co. LLC now owns 15,222 shares of the company’s stock worth $1,865,000 after acquiring an additional 2,374 shares in the last quarter. 72.30% of the stock is currently owned by institutional investors.

About PepsiCo

PepsiCo, Inc operates as a food and beverage company worldwide. The company's Frito-Lay North America segment offers branded dips; Cheetos cheese-flavored snacks; and Doritos tortilla, Fritos corn, Lay's potato, Ruffles potato, and Tostitos tortilla chips. Its 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 Aunt Jemima, Cap'n crunch, Life, Quaker Chewy, Quaker, and Rice-A-Roni brands.

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