PepsiCo Inc. operates worldwide beverage, snack, and food businesses. Through operations, authorised bottlers, contract manufacturers and other third parties, the group serves customers and consumers in more than 200 countries.
The company's beverage brands include Pepsi, Mountain Dew, Gatorade, and Aquafina water. The company also owns Frito-Lay, with offerings such as Lay's, Ruffles, Doritos, and Cheetos. The Quaker Foods unit makes, markets, distributes, and sells cereals, rice, pasta, and other branded products.
Technically, a stable bullish trend makes the share attractive as an investing option (see the insert on the main chart). Such a trend is often considered to be a positive sign for investors, as it suggests that there is a high level of demand for the stock and that investors are optimistic about the company's prospects.
A stable bullish trend gives rise to a bullish market structure, which is defined by a series of higher highs (HH) and higher lows (HL). The trend continues in the same direction until the stock price records a lower low (LL).
According to the Relative Strength Index (RSI), the stock is in overbought territory at ~$220. This makes our profit target of $200 realistic.
We suggest a low at-risk allocation for this trade.
Share Information
| Share code | PEP |
|---|---|
| Industry | Food, Beverage & Tobacco |
| Market capatalisation (USD) | 245.16 billion |
| One year total return | 11.20% |
| Return year-to-date | -0.81% |
| Current price(USD) | 178.01 |
| 52 weeek high(USD) | 186.84 |
| 52 week low(USD) | 154.86 |
| Financial year end | December |
| Closing paragraph | The current share price makes for an attractive entry point. The share is trading at a beta of 0.68, indicating that the share is less volatile than the overall market. |
Consensus expectations
(Bloomberg)
| FY22 | FY23E | FY24E | FY25E | |
|---|---|---|---|---|
| Headline Earnings per Share (USD) | 6.79 | 7.24 | 7.87 | 8.47 |
| Growth (%) | - | 6.57 | 8.79 | 7.57 |
| Dividend Per Share (USD) | 4.53 | 4.92 | 5.28 | 5.65 |
| Growth (%) | - | 8.64 | 7.41 | 6.91 |
| Forward PE (times) | - | 24.60 | 22.61 | 21.02 |
| Forward Dividend Yield (%) | - | 2.76 | 2.97 | 3.17 |
| Closing paragraph | Medium-term growth prospects remain solid. The dividend yield is attractive. Even though moderate fluctuation in the share price is expected, several technical indicators are guiding for the upside price potential. | |||
Buy or Sell Rationale
Technical Analysis :
Long term fundamental view:
| Share Name and position |
TAP - Stop loss (Close the position) |
LHX - Stop loss (Close the position) |
F - Stop loss (Close the position) |
|---|---|---|---|
| Entry | 53.65 | 212.87 | 12.74 |
| Current | 49.91 | 195.25 | 11.30 |
| Movement | -7% | -8.3% | -11.3% |
| Summary text | After the share reached our stop-loss level, we closed the position. Downside price momentum is a concern. | After the share reached our stop-loss level, we closed the position. The share remains close to oversold territory. | After the share reached our stop-loss level, we closed the position. The share recently fell below its 200-day simple moving average. |
| Share Name and position |
AAPL - BUY (Continue to hold) |
XLF - BUY (Continue to hold) |
BDRY - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 153.71 | 139.66 | 9.05 |
| Current | 159.28 | 144.69 | 9.31 |
| Movement | 3.6% | 3.6% | 2.9% |
| Summary text |
We are monitoring the price, which is currently retracing from the lower range of a linear regression channel pattern. Remains above its 200-day simple moving average.
Our take profit target is set at $170, with a trailing stop-loss at $150.50. We plan to exit the position around 16 June 2023. |
The price is currently testing the upper range of a declining channel pattern. The stock is testing its 200-day simple moving average.
Our take profit target is set at $156 with a trailing stop-loss at $138. Exit the position around 24 May 2023. |
The price is currently in an accumulation phase and tested its 200-day simple moving average.
Our take profit target remains at $12 with a trailing stop-loss at $8.10. We plan to exit the position on 21 June 2023. |
