PepsiCo shares have struggled against Coca-Cola. That may change after earnings Thursday

PepsiCo Earnings Thursday Could Signal Shift in Competitive Edge Over Coca-Cola for Investors

Picking between Pepsi and Coca-Cola right now is kind of like choosing teams in a tug-of-war—one side looks like the clear favorite, but sometimes the underdog surprises everyone.

Why This Matters for Investors

For people who invest in stocks, especially in the food and drink sector, PepsiCo and Coca-Cola are two giants. Their performance can shape not just your portfolio, but also what happens across the market, since they’re both seen as “safe” choices when things get rough.

Bulls: Reasons to Be Positive on PepsiCo

  • Technical Signs: PepsiCo’s stock has been struggling, but now it’s showing signs that it could be ready for a comeback. Some experts say if the price goes above $146, it could mean good things ahead.
  • Momentum Indicators: Tools like the RSI and MACD (which help investors spot trends) are starting to show that Pepsi’s fall might be over and a bounce could happen.
  • Possible Turnaround: There’s a chart pattern called an “inverted head-and-shoulders” forming. Historically, this can mean a big move upward is coming, with possible targets as high as $175 or $180 if things go right.
  • Risk/Reward: Right now, the risk of losing more is balanced by the chance of a strong rebound if Pepsi surprises investors over the next few months.

Bears: Reasons to Stay Cautious on PepsiCo

  • Recent Performance: PepsiCo’s shares are down about 8% this year and 16% over the last year, while Coca-Cola has done better. That’s a big gap.
  • Analyst Opinions: Out of 26 analysts, most only rate PepsiCo as “neutral”—not a strong buy. Only 8 say “buy,” and one even says “sell.”
  • Safe Sector, Slow Moves: Consumer staples like PepsiCo don’t usually make big jumps fast. Even if the turnaround is real, it could take a while.
  • Past Earnings Drops: Twice in the last year, PepsiCo’s stock fell almost 5% after earnings reports. This shows there’s still risk every time results come out.
Related:  Japan’s Stock Rally Signals New Opportunities for Investors Seeking Growth in Asian Markets

Comparing PepsiCo and Coca-Cola

Coca-Cola is the favorite among analysts, with 29 saying “buy” and only 3 saying “hold.” Even famous investors like Warren Buffett have picked Coke. The average price target for Coke is 18% above where it trades now, while PepsiCo’s is closer to 10% higher.

But sometimes, when everyone loves one stock, the other becomes a bargain. If PepsiCo can turn things around, investors who buy now might be getting in at a good price.

Over the long run, both stocks have been steady performers. In fact, according to CNBC, Coca-Cola has delivered an average annual return of about 8% per year over the past decade, with PepsiCo not far behind.

Investor Takeaway

  • Watch the $146 price level for PepsiCo; a move above could signal a real turnaround.
  • Consider stop-loss orders around $135 to protect against another drop.
  • Remember that consumer staples are slow movers—patience is key if you invest here.
  • Diversification matters: don’t put all your eggs in one soda basket.
  • Keep an eye on upcoming earnings for both companies; surprises can move the stocks either way.

For the full original report, see CNBC

Similar Posts