PepsiCo Stock Pops on Strong Results, Outlook

PEP already sports a 7.5% year-over-year lead

Deputy Editor
Oct 12, 2022 at 11:07 AM
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PepsiCo Inc (NASDAQ:PEP) is one of the first companies to kick off the new earnings season, announcing its third-quarter report before the bell this morning. The beverage giant posted earnings of $1.97 per share on revenue of $21.97 billion, both higher than the $1.84 per share and $20.84 billion analysts anticipated. PepsiCo also lifted annual revenue and profit expectations on strong demand for soda and snacks, despite price increases. 

At last glance, PepsiCo stock was up 4.6% to trade at $170.10, with rival Coca-Cola (KO) getting a boost from the report as well. Though PEP had been moving lower since its Aug. 17 record high of $181.07, it still sports a 7.5% year-over-year lead. Today's pop also has shares back above the 320-day moving average.

Unsurprisingly, options traders were quick to the draw this morning. So far, 22,000 calls and 17,000 puts have crossed the tape, which is seven times the intraday average. The October 170 call is the most active, with new positions currently being bought to open there. 

This denotes a shift in sentiment, per PepsiCo stock's 10-day put/call ratio of 1.00 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 92% of annual readings.

Analysts have yet to respond to the news, though the majority are already bullish. Of the 11 firms in coverage, eight carry a "strong buy" rating, and three a "hold." Plus, the 12-month consensus target price of $181.73 sits at a 7.5% premium to current levels. 


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