PepsiCo Stock Slumps to 52-Week Low: Buy the Dip or Stay Away?

Shares of PepsiCo Inc. PEP hit a new 52-week low of $130.16 yesterday, before rising 0.4% to close trading at $130.74. The current price reflects a 28.7% discount from its 52-week high of $183.41, highlighting a challenging year for the beverage company. Overall, the PEP stock has trended downward in the past year, driven by challenges in its North America operations since the start of 2024, including reduced consumer demand and product recalls in the QFNA segment. Additionally, the recent tariff-related headwinds have led investors to lose confidence in the stock’s prospects.In the year-to-date period, PEP shares have declined 14% against the broader industry’s 6.9% rise and the Zacks Consumer Staples sector’s 5% growth. The stock has also underperformed the S&P 500’s decline of 4.3% in the same period.PepsiCo’s YTD Stock Price Performance Image Source: Zacks Investment Research PEP shares have underperformed its close competitor The Coca-Cola Company’s KO gain of 15.2% in the year-to-date period. PEP also lagged other industry peers, including Monster Beverage (MNST) and Keurig Dr Pepper’s (KDP) 14.2% and 6.2% growth, respectively.PepsiCo trades below the 50-day and 200-day simple moving averages, indicating a bearish sentiment.PEP Stock Trades Below 50 & 200-Day Moving Averages Image Source: Zacks Investment Research Estimate Revision Trend for PEPThe Zacks Consensus Estimate for PepsiCo's 2025 EPS moved down 4.1% in the last 30 days. The negative estimate revision trend reflects analysts’ concerns about the impacts of tariffs on the company’s results. The consensus estimate for 2026 EPS has moved down 4.7% in the past 30 days. (See the Zacks Earnings Calendar to stay ahead of market-making news.)For 2025, the Zacks Consensus Estimate for PEP’s sales implies year-over-year growth of 0.4%, whereas the EPS estimate suggests a decline of 2.8%. The consensus mark for 2026 sales and earnings indicates 3.3% and 5.7% year-over-year increases, respectively. Image Source: Zacks Investment Research Analyzing PEP Stock’s Drop to 52-Week LowPepsiCo has faced a series of headwinds that have weighed on its share price over the past year, most notably persistent soft top-line trends and ongoing challenges within its North America operations dating back to early 2024. The recent drop to a 52-week low also mirrors the company's more cautious outlook and the muted tone of its first-quarter 2025 earnings update.Management highlighted rising global macroeconomic volatility, particularly concerning trade dynamics, as a key pressure point. This environment is expected to significantly increase supply-chain costs, driven by factors such as tariffs and difficulties in sourcing critical global inputs. Without successful cost containment, these pressures can erode margins and weigh on earnings throughout the year.Adding to the uncertainty, consumer demand remains sluggish across many key markets. High inflation continues to constrain household spending, leading to more price-sensitive behavior and reduced discretionary spending, especially in categories like snacks. While PepsiCo has introduced more value-oriented offerings focused on flavor, functionality and portion control, consumer engagement has yet to fully rebound.In response, the company is actively pursuing mitigation strategies aimed at controlling costs while maintaining operational stability and safeguarding customer relationships. Strategic initiatives include enhancing international expansion and revitalizing performance in North America through ongoing productivity programs rooted in automation, standardization and digital transformation.Despite these efforts, PepsiCo has revised its full-year guidance. It expects core constant-currency EPS to be flat year over year, down from the previously mentioned mid-single-digit rise. Organic revenue are projected to rise in the low-single-digit range, reflecting the increasingly complex and constrained operating environment.Does PEP’s Stock Valuation Discount Signal Trouble?PepsiCo is currently trading at a forward 12-month P/E ratio of 16.16X, below the industry average of 18.67X and the S&P 500’s average of 20.81X.At 16.16X P/E, PepsiCo is trading at a valuation much lower than its competitors. Its competitors, such as Coca-Cola, Monster Beverage and Keurig, are delivering solid growth and trade at higher multiples. Coca-Cola, Monster Beverage and Keurig have forward 12-month P/E ratios of 23.54X, 31.34X and 16.35X — all significantly higher than PepsiCo.Although PEP’s stock valuation is currently lower than that of its industry peers, this gap might not be as advantageous as it appears. The lower price can signal underlying issues rather than presenting a straightforward investment opportunity. Image Source: Zacks Investment Research Is the Recent Pullback in PepsiCo Shares a Buying Opportunity?Investing in the PEP stock demands a measured and strategic outlook, especially in light of ongoing headwinds within its North American operations and persistent macroeconomic pressures. Recent market signals point to limited visibility for a near-term turnaround in the North America region, while the company’s updated guidance underscores the continued impacts of inflation and global trade-related tariffs on its margins and earnings outlook.Although PEP is trading at a discounted price-to-earnings ratio relative to the industry average, making it appear attractively valued on the surface, this discount may reflect broader investor concerns. A negative trend in earnings estimate revisions and bearish technical signals suggest that caution is warranted.For investors considering entry, it may be prudent to wait for more concrete signs of stabilization or growth momentum. As it stands, with a Zacks Rank #4 (Sell), PepsiCo remains a stock to watch—but not necessarily to buy—until clearer recovery indicators emerge.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>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