STOCK:  Call Options on PepsiCo (PEP) for the Week

PepsiCo (PEP) is one of those stocks that is going to turn bullish in the coming week, owing to the release of important tidbits of financial data from around the world. For starters, PepsiCo has performed better than Coca-Cola Company (KO)  in 2015, with a 3.2% year-to-date growth compared to Coca-Cola’s stock price plunge of 1.1%. At present, the forward price/earnings ratio for PepsiCo is 20.9, compared to Coca-Cola Company’s 19.1. The price of PepsiCo Inc. is $102.19 (November 2, 2015). The company’s market capitalisation is $148.88 billion with a dividend of 2.81 and a yield of 2.73%. The stock has lost 0.38% in the past 5 days.

However, the long-term prospects for the stock are positive because PepsiCo is a company that understands market diversity. The company’s chief brands are clearly separated into products that are good for you, better for you and best for you, with multiple product lines and categories to satisfy market preferences. The consumer market has changed rapidly from its preference for carbonated sugary drinks to healthier food sources. In this vein, PepsiCo is leading the way and its earnings certainly reflect that. I definitely rate the stock as a buy, given that its strengths outweigh its weaknesses on multiple fronts. These include PepsiCo’s ROE (Return on Equity), growing profitability and a stable stock price. While net income has been sub-optimal, the strength of the stock is certainly its saving grace. Analysts across the board recommend traders go short on Coca-Cola company and long on PepsiCo.

Reasons for bullish sentiment on PepsiCo:

On a rating scale of 1.0 (strong buy) to 5.0 (sell), the mean recommendation this week for PepsiCo is 2.2. This places the stock firmly in the strong buy sector, and that’s precisely what I recommend for binary options traders. The stock has a high-price target of $111 and a low price target of $83, with a mean target of $104.70. The latest recommendation by Sterne Agee CRT in July 2015 was an upgrade to a buy. Based on the current weakness of competing brands, and the reduction in carbonated drink taxes in Mexico due to a public outcry, sentiment looks bullish for PepsiCo.