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Is Amazon a best-buy for the holidays?
News
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Asset Watch

Will PepsiCo be a winner this earnings season?

 

Thursday, October 6 2022

With the Q3 earnings season set to heat up in mid-October, separating the winners from the losers is immensely important. Moreover, S&P 500 regained its swagger recently, continuing the bullish trend of testing corporate performance.

 

However, Morgan Stanley analysts highlighted their $198 PepsiCo price target on Oct. 4, telling clients, “We are positive on PEP ahead of Q3 results on Oct. 12, with an expected solid Q3 top line and EPS beat, which even with FX pressure, should drive higher net full-year EPS guidance.”

 

While the food and beverage giant sports healthy fundamentals, will the technicals prove more challenging?

On Oct. 4, PepsiCo closed above its November 2021 and early March 2022 highs while also closing near its June 2022 highs. PepsiCo also traded relatively range-bound in 2022, with roughly $177 acting as resistance on multiple occasions. Therefore, if $166 holds, there is a pathway back to $177, and if Morgan Stanley is correct, $198 will mark a new all-time high.

In contrast, the 200-day moving average is the elephant in the room. After closing below the key level on Sep. 13, PepsiCo hasn’t reversed the damage since. Furthermore, PepsiCo rallied above the 200-day MA intraday on Sep. 21, 22, 26 and 27 but couldn’t hold the gains into the close.

As a result, with support near $166 and the 200-day MA at $169.59, will the bulls or the bears win this fight?


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