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C-Suite Squawk: PepsiCo, Inc. (PEP)

Despite concerns over 'not having it all,' Nooyi's reign at PEP has resulted in strong gains for the stock

by 7/15/2014 10:43:57 AM
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In an interview with The Atlantic in late June, PepsiCo, Inc. (NYSE:PEP) CEO Indra K. Nooyi was asked "What's your opinion about whether women can have it all?" "I don't think women can have it all. I just don't think so. We pretend we have it all. We pretend we can have it all," was the frank reply given by the 58-year-old mother of two. Nooyi's comments follow in the footsteps of Facebook Inc (NASDAQ:FB) exec Sheryl Sandberg, who made similar statements in March 2013.

However, Nooyi's comments haven't been well-received by everyone; specifically, reality TV star and entrepreneur Kim Kardashian, who took to the airwaves to express her disappointment with the executive. Speaking on CNBC, Kardashian challenged Nooyi, saying, "I feel like it's a little bit discouraging to say that, even if I couldn't and it wasn't possible, I would try. And I would, you know, try my best to do it all."

Despite the controversy Nooyi is creating off the charts, the CEO's tenure has resulted in a roughly 44% gain for PEP since the stock's 2008 low of $63.28. More recently, the equity has been bouncing higher atop its 10-day moving average since late June, and in yesterday's session, PEP tagged the $91.39 mark -- its highest perch on record.

In spite of this withstanding technical tenacity, sentiment around the Street has tended toward the skeptical side of late. In the options pits, for example, the stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.92 ranks in the 91st percentile of its annual range. Simply stated, puts have been bought to open (relative to calls) with more rapidity just 9% of the time within the past year.

Elsewhere, short interest surged 21.6% over the past two reporting periods, and is now lingering near levels not seen since mid-March. Plus, six out of 16 covering analysts still maintain a tepid "hold" recommendation toward the security, and the consensus 12-month price target of $93.56 stands at a slim 3% premium to PEP's current price of $90.87.

Should PepsiCo, Inc. (NYSE:PEP) continue to make its way up the charts, an unwinding of the skepticism surrounding the equity could help fuel its fire. It seems the brokerage bunch may be starting to change its tune, as UBS hiked its price target for PEP by $12 to $95 yesterday afternoon.


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