Analysis of PepsiCo's Growth, Valuation, and New Product Launch

PepsiCo and Beyond Meat introduce new Beyond Meat Jerky product

Mar 30, 2022 at 12:05 PM
facebook twitter linkedin


On March 23, PepsiCo, Inc. (NASDAQ:PEP) and Beyond Meat Inc (NASDAQ:BYND) announced the debut of Beyond Meat Jerky. The plant-based jerky is the first product from the two companies' joint-venture, Planet Partnership, LLC. The jerky product was rolled out at stores in the United States this month.

While Pepsi stock boasts a year-to-date lead of 16.7%, it's still sitting at a 3.8% year-to-date deficit. The equity is well on its way back toward its January highs above the $176 level, staging a bounce off the 320-day moving average, though investors should watch out for the $168 level, which has served as a ceiling since mid-February. 

pep march 30

Now might be a good time to speculate on PEP's next move with options. The stock's Schaeffer's Volatility Index (SVI) of 16% stands higher than just 19% of readings from the past year. In other words, options traders are pricing in relatively low volatility expectations at the moment. 

From a fundamental point of view, PepsiCo provides a relatively safe business model that has produced consistent revenue growth over multiple years. PEP has increased its annual revenues 23% since fiscal 2018. Additionally, the food and beverage company is estimated to grow its revenues 4.2% and its earnings 8.5% for fiscal 2023.

However, PepsiCo's annual net income has only increased 4% since fiscal 2019. PEP also experienced a 42% decrease in net income between fiscal 2018 and fiscal 2019. In addition, PepsiCo stock has a relatively high valuation, trading at a forward price-earnings ratio of 24.51 and a price-sales ratio of 2.86.

Furthermore, PepsiCo holds a very weak balance sheet with $5.99 billion in cash and $42.38 billion in total debt. Still, the company’s essential business model and its dividend yield of 2.59% make PepsiCo stock a viable option for dividend investors looking to retain their wealth, more so than grow at a significant rate.

 

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 

 


 


 
Special Offers from Schaeffer's Trading Partners