Should You Buy or Sell PepsiCo (PEP) Stock Now?

PepsiCo (PEP), a global giant in the food and beverage industry with brands like Lay's, Gatorade, and Mountain Dew, is facing headwinds in the stock market despite its solid fundamentals. The company, valued at $216.5 billion, is a "mega-cap" stock with a strong global presence in over 200 countries and a diversified revenue stream from both food and beverages.

However, PEP shares are currently trading 14% below their 52-week high of $183.41, with the stock down 11% over the past three months and 7.1% year-to-date. For perspective, the Nasdaq Composite ($NASX) is up 32.3% in 2024, making PepsiCo’s performance stand out as underwhelming. Adding to the contrast, rival Coca-Cola (KO) has gained 6.7% over the past year.

Key Takeaways for Traders

• Recent Earnings Support Long-Term Prospects

In Q3, PepsiCo exceeded expectations with core EPS of $2.31, a 2.7% year-over-year increase. Despite missing revenue estimates at $23.3 billion, the company posted strong international results and reaffirmed its 2024 guidance for at least 8% core EPS growth. This suggests the fundamentals remain intact, even if the stock is struggling in the short term.

• Bearish Momentum in the Charts

PEP has been trading below its 50-day and 200-day moving averages since late October, signaling a bearish trend. The stock’s recent volatility and poor price momentum have made it less attractive to short-term traders.

• Comparison with Coca-Cola

While PepsiCo offers diversification with its significant food segment, Coca-Cola’s more straightforward beverage model is delivering better returns. KO’s performance could sway investor sentiment further unless PEP shows clearer signs of recovery.

• Analyst Sentiment

Despite the challenges, analysts remain cautiously optimistic. The stock holds a “Moderate Buy” rating with a target price of $183.28, reflecting potential upside of 16.2%. This suggests there may still be value for long-term investors looking to capitalize on the current dip.

Bottom Line on PepsiCo

PepsiCo’s stock may be struggling, but its strong earnings, global reach, and diversified portfolio make it worth monitoring. For traders, the key question is whether PepsiCo can regain momentum to match its solid fundamentals. The bearish technical signals and underperformance compared to Coca-Cola are short-term concerns, but improving sentiment around its future growth could provide an entry opportunity. Keep an eye on its ability to stabilize and whether it can break out of its current downtrend.