PepsiCo Slips Below 50-Day SMA: Bargain Opportunity or Red Flag?

PepsiCo Inc. PEP shares seem to have lost luster since the release of its third-quarter 2025 results, showing a marked slowdown in the past month. This slowdown pushed the PEP stock below industry thresholds and signaled bearish technical sentiment. As a result, the PEP stock slipped below its 50-day simple moving average (SMA) on Nov. 3. Notably, the stock closed at $143.60 on Nov. 3, 2025, moving below the 50-day SMA of $145.5. Since then, the PEP stock has been on a downtrend.PepsiCo’s drop below the 50-day SMA signals weakness, suggesting a shift from short-term bullish to bearish sentiment. It highlights fading investor confidence and slower buying interest.However, the soft drinks behemoth trades above its 200-day SMA, indicating improving sentiment toward its long-term fundamentals and market outlook. SMA is an essential tool in technical analysis that helps investors evaluate price trends by smoothing out short-term fluctuations. This approach also provides a clearer perspective on a stock's long-term direction.PEP Stock Trades Below 50-Day & Above 200-Day SMAs Image Source: Zacks Investment Research PepsiCo’s lost momentum is evident from its 4.2% decline in the past month against the Zacks Beverages – Soft Drinks industry’s growth of 3%. The stock has also underperformed the broader Zacks Consumer Staples sector’s decline of 0.5% and the S&P 500's rally of 1.6% in the same period.PEP’s performance is notably weaker than that of its competitors, The Coca-Cola Company KO and Monster Beverage Corporation MNST, which have rallied 5.6% and 4.3%, respectively, in the past month. PEP shares have also underperformed Keurig Dr Pepper Inc. KDP, which slipped 1.1% in the same period.PepsiCo’s 1-Month Price Performance Image Source: Zacks Investment Research At its current price of $142.62, the PepsiCo stock trades 11.8% above its 52-week low mark of $127.60 and 14.5% below its 52-week high mark of $166.89.What’s Draining the Fizz From PepsiCo Shares?PepsiCo is facing a patch of flat performance as a mix of operational and macroeconomic headwinds weighs on investor sentiment. While the company delivered nearly 3% reported net revenue growth in the third quarter of 2025, an acceleration from the prior quarter, its growth story appears clouded by mounting pressures on profitability and cost control.The beverage giant continues to grapple with higher supply-chain and input costs, including tariffs and ingredient sourcing challenges, which shaved about three percentage points off its core EPS in the quarter. Meanwhile, consumer spending fatigue and a subdued packaged foods environment in North America have hurt the demand for the Frito-Lay and Quaker brands. PepsiCo Foods North America remains under pressure despite modest progress in permissible snacks, as volume softness, promotional normalization and portfolio realignment weigh on margins.To regain momentum, PepsiCo is aggressively cutting costs, streamlining SKUs, closing plants and reducing headcount, while reengineering its price-pack architecture to deliver better value. However, these restructuring moves, while necessary, have yet to translate into meaningful earnings expansion.International markets remain a bright spot, marking 18 consecutive quarters of mid-single-digit organic growth, but global weather disruptions and FX headwinds persist. Overall, with management guiding for low-single-digit revenue growth and flat EPS for 2025, investors are questioning how quickly PepsiCo can reignite sustained growth and profitability amid a shifting consumer landscape and rising competitive intensity.PEP’s Estimate Revision TrendThe Zacks Consensus Estimate for PepsiCo’s 2025 and 2026 EPS moved up 1% and 0.8%, respectively, in the last 30 days. The upward revision in earnings estimates indicates that analysts are gaining confidence in the company’s growth potential.The Zacks Consensus Estimate for PEP’s 2025 sales suggests year-over-year growth of 1.8% and that for EPS indicates a decline of 0.6%. For 2026, the Zacks Consensus Estimate for PepsiCo’s sales and EPS implies 3.3% and 5.6% year-over-year growth, respectively. Image Source: Zacks Investment Research Are PepsiCo’s Fundamentals Intact?Despite short-term market softness, PepsiCo remains fundamentally robust and strategically positioned for sustained long-term growth. The company posted net revenue growth in the third quarter of 2025, driven by resilient international performance and improving momentum in its North America beverage segment. Trademark Pepsi and Mountain Dew platforms continued to deliver solid volume and net revenue gains, supported by strong innovation and marketing execution.PepsiCo’s long-term growth strategy is anchored in innovation, portfolio reshaping and structural efficiency. Recent acquisitions, including poppi, Siete and Sabra, along with the partnership with Celsius, are expected to strengthen its presence in functional beverages and permissible snacks. Meanwhile, initiatives to optimize price-pack architecture, streamline SKUs and expand automation across operations are set to enhance productivity and margins.With continued investment in affordability, functional products and digital channels, PepsiCo is balancing near-term cost pressures with disciplined execution. Management’s confidence in achieving steady organic revenue and margin expansion underscores that PepsiCo’s fundamentals remain intact, making it well-poised for long-term value creation.PepsiCo’s ValuationPEP is currently trading at a forward 12-month P/E multiple of 16.79X, below the industry average of 17.8X and the S&P 500’s average of 23.3X.At 16.79X P/E, PEP is trading at a valuation much lower than its competitors, such as Coca-Cola and Monster Beverage, which are delivering solid growth and trade at higher multiples. KO and MNST have forward 12-month P/E ratios of 22.13X and 32.93X, both significantly higher than PepsiCo. However, the stock’s current valuation is above Keurig Dr Pepper’s 12.14X multiple. Image Source: Zacks Investment Research Should You Buy PEP Stock Now?PepsiCo may be navigating short-term headwinds, but its underlying strength and growth potential remain firmly intact. The recent dip below a key technical level reflects near-term caution amid cost pressures and softer consumer demand. However, the company’s resilient global operations, strong innovation pipeline and disciplined cost actions signal a healthy long-term outlook.PEP’s continued investments in functional beverages, healthier snacks and digital expansion, alongside efficiency-driven initiatives, are expected to support gradual improvement in margins and profitability. Upward estimate revisions also highlight growing confidence in the company’s earnings momentum.Trading at a valuation below peers and the broader market, PepsiCo presents an attractive opportunity for patient investors. With solid fundamentals, consistent cash generation and a proven growth strategy, the Zacks Rank #2 (Buy) stock looks well-positioned to regain its fizz and deliver steady long-term gains. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. Little-known AI firms tackling the world's biggest problems may be more lucrative in the coming months and years.See "2nd Wave" AI stocks now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CocaCola Company (The) (KO): Free Stock Analysis Report PepsiCo, Inc. (PEP): Free Stock Analysis Report Monster Beverage Corporation (MNST): Free Stock Analysis Report Keurig Dr Pepper, Inc (KDP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks