Zacks Investment Research Lowers PepsiCo Inc. (PEP) to Sell
PepsiCo Inc. (NYSE:PEP) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a research note issued on Thursday.
According to Zacks, “Soft CSD volumes is a pressing concern for Pepsi. Further, growing health awareness is hurting the CSD category, resulting in a 3% volume decline in the first half of 2016. Again, rising volatility in global markets and increasing currency headwind may dampen growth, going forward. That said, Pepsi has been doing well on the back of significant innovation, continued momentum in Frito-Lay business, revenue management strategies, improved productivity and better market execution. Moreover, Pepsi has been seeing higher volumes and profits in the North American segments due to an improving economy, better industry pricing dynamics and a consistency in positive innovation. We believe that Pepsi’ new product lineup, aggressive marketing efforts, productivity improvement and cost-saving initiatives should drive profits. Pepsi has rolled out several new products recently which management believes should drive sales and profits in the second half.”
Several other brokerages have also recently issued reports on PEP. BMO Capital Markets restated an “outperform” rating on shares of PepsiCo in a research note on Friday, July 15th. Argus upped their price objective on PepsiCo from $116.00 to $124.00 and gave the company a “buy” rating in a research note on Wednesday, July 13th. Sanford C. Bernstein restated an “outperform” rating and set a $118.00 price objective on shares of PepsiCo in a research note on Wednesday, August 10th. Susquehanna restated a “neutral” rating on shares of PepsiCo in a research note on Sunday, July 10th. Finally, Credit Agricole SA restated an “outperform” rating on shares of PepsiCo in a research note on Monday, August 22nd. One equities research analyst has rated the stock with a sell rating, ten have given a hold rating and fourteen have given a buy rating to the stock. The company has an average rating of “Buy” and an average target price of $110.96.
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PepsiCo (NYSE:PEP) traded up 0.4449% on Thursday, reaching $107.6066. The company had a trading volume of 484,241 shares. PepsiCo has a 12 month low of $91.45 and a 12 month high of $110.94. The stock has a 50 day moving average of $107.34 and a 200 day moving average of $104.79. The firm has a market capitalization of $154.86 billion, a PE ratio of 30.4059 and a beta of 0.48.
PepsiCo (NYSE:PEP) last released its quarterly earnings results on Thursday, July 7th. The company reported $1.35 EPS for the quarter, topping the Thomson Reuters’ consensus estimate of $1.30 by $0.05. PepsiCo had a return on equity of 54.91% and a net margin of 8.34%. The business had revenue of $15.40 billion for the quarter. During the same quarter last year, the firm posted $1.32 EPS. The company’s revenue was down 3.3% compared to the same quarter last year. On average, analysts anticipate that PepsiCo will post $4.76 EPS for the current year.
The business also recently disclosed a quarterly dividend, which will be paid on Friday, September 30th. Stockholders of record on Friday, September 2nd will be given a dividend of $0.7525 per share. The ex-dividend date is Wednesday, August 31st. This represents a $3.01 dividend on an annualized basis and a dividend yield of 2.81%. PepsiCo’s dividend payout ratio (DPR) is presently 84.79%.
In other news, EVP Mehmood Khan sold 51,137 shares of the stock in a transaction on Thursday, July 28th. The stock was sold at an average price of $107.30, for a total value of $5,487,000.10. Following the completion of the sale, the executive vice president now owns 164,464 shares in the company, valued at $17,646,987.20. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through the SEC website. Also, CEO Laxman Narasimhan sold 3,219 shares of the stock in a transaction on Wednesday, July 13th. The shares were sold at an average price of $109.11, for a total value of $351,225.09. Following the completion of the sale, the chief executive officer now owns 97,057 shares of the company’s stock, valued at approximately $10,589,889.27. The disclosure for this sale can be found here. Insiders own 0.33% of the company’s stock.
Several hedge funds have recently added to or reduced their stakes in the stock. D. Scott Neal Inc. raised its stake in PepsiCo by 8.1% in the second quarter. D. Scott Neal Inc. now owns 944 shares of the company’s stock worth $100,000 after buying an additional 71 shares during the last quarter. Piershale Financial Group Inc. raised its stake in PepsiCo by 0.4% in the second quarter. Piershale Financial Group Inc. now owns 1,005 shares of the company’s stock worth $106,000 after buying an additional 4 shares during the last quarter. Delphi Private Advisors LLC raised its stake in PepsiCo by 1.3% in the second quarter. Delphi Private Advisors LLC now owns 1,002 shares of the company’s stock worth $106,000 after buying an additional 13 shares during the last quarter. Global X Management Co. LLC raised its stake in PepsiCo by 92.1% in the second quarter. Global X Management Co. LLC now owns 1,101 shares of the company’s stock worth $117,000 after buying an additional 528 shares during the last quarter. Finally, Stelac Advisory Services LLC raised its stake in PepsiCo by 13.9% in the second quarter. Stelac Advisory Services LLC now owns 1,185 shares of the company’s stock worth $126,000 after buying an additional 145 shares during the last quarter. Institutional investors own 69.81% of the company’s stock.
PepsiCo Company Profile
PepsiCo, Inc is a food and beverage company. The Company, through its operations, bottlers, contract manufacturers and other third parties, is engaged in making, marketing, distributing and selling a range of beverages, foods and snacks, serving in over 200 countries and territories. The Company operates through six segments, namely, Frito-Lay North America (FLNA); Quaker Foods North America (QFNA); North America Beverages (NAB); Latin America, which includes its beverage, food and snack businesses in Latin America; Europe Sub-Saharan Africa (ESSA), which includes its beverage, food and snack businesses in Europe and Sub-Saharan Africa, and Asia, Middle East and North Africa (AMENA), which includes its beverage, food and snack businesses in Asia, Middle East and North Africa.
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