PepsiCo, Inc. (PEP) is a global food and beverage company operating through six segments: Frito-lay North America, Quaker Foods North America, Latin America Foods, PepsiCo Americas, Asia, Middle East, Africa and Europe. The stock is currently trading around $95.86 at the upper end of its 52 week range of $87.46-$100.76. The stock has been barely outperforming the market this year rallying 1.3% year to date. PEP is scheduled to report earnings before the opening bell tomorrow, and the stock is bearish today falling by $0.61 or 0.63% on the session ahead of the close amidst the Greece and China troubles.

Over the past 12 quarters PEP has rallied on earnings day 9 times with an average move of 2.42%. The stock appears fairly bullish on a chart going into the release having traded broken to the upside of the Ichimoku Cloud at the beginning of July on the daily bars. Over the past 12 quarters PEP has rallied from earnings to the nearest options expiration 8 times with an average move of 3.09%. The stock looks as if it could reverse today’s trend and rip to the upside in today’s session. Investors are looking to see how the company fares with currency headwinds. The company continues to stand as a market leader in U.S. Savory Snacks & Beverage markets and poised to continue strong domestic sales.

The options market is currently implying a move of around $2.67 or 2.8% in PEP by this Friday’s close giving us targets of $93.19 and $98.53.

Andrew Keene

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