Barclays Upgrades Pepsi Stock, Options Traders Respond

The equity is moving past pressure at the $135 region, as well

Deputy Editor
Mar 22, 2021 at 10:21 AM
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The shares of PepsiCo Inc (NASDAQ:PEP) are up 2.6% to trade at $136.60 at last check, after Barclays upgraded the stock to "overweight" from "equal weight," with a price target of $151. The firm sees both short and long-term success for PepsiCo, detailing a path to multi-year growth.

On the charts, PEP has steadily moved lower since the start of the year, though it recently found a floor at the $128 level. Today, the stock is breaking past pressure at the $135 region, as well as the 40-day moving average. Year-to-date, the equity is down 7.9%.

Analysts are split on PepsiCo stock, with seven of the 14 in coverage carrying a "strong buy," while the remaining seven sport a "hold" or worse rating. Meanwhile, the 12-month consensus price target of $152.09 is an 11.3% premium to current levels.  

In the options pits, PEP's 10-day call/put volume ratio of 2.42 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands higher than 85% of readings from the past year. This indicates calls being picked up at a relatively faster-than-usual pace during this time. 

Today, the options pits echo a similar sentiment. So far, 6,078 calls and 2,934 puts have crossed the tape, which is double the volume typically seen at this point. The April 140 call is the most popular, which also happens to be the second most active open interest position. 

Now could be a good time to weigh in on these options, too. The stock's Schaeffer's Volatility Index (SVI) of 20% stands higher than just 8% of all other readings in its annual range, implying that options players are pricing in low volatility expectations at the moment. 


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