PepsiCo Stock Brushes Off Bear Note Before Earnings

Option bulls are targeting PEP as it moves higher

Laura McCandless

Deputy Editor

Jul 10, 2023 at 11:36 AM

PepsiCo Inc (NASDAQ:PEPSI) is eyeing its sixth day of gains in the last seven, up 1.3% at $185.50 at last glance, despite a price-target cut from Barclays to $198 from $206. The bear note comes ahead of the company's second-quarter earnings report, due out before the open on Thursday, July 13.

Call traders are chiming in ahead of the report, with 4,345 calls exchanged so far, volume that's double what's typically seen at this point. The July 190 call is the most active contract, followed by the weekly 7/14 185-strike call.

Pepsi stock finished the day positive after its last three earnings reports, and closed higher in five of its last eight next-day sessions. In the past two years, the stock averaged a post-earnings move of 1.5%, regardless of direction, which is lower than the 2.8% move the options pits are pricing in this time around.

It's worth noting that PepsiCo stock's 14-day relative strength index (RSI) of 33.6 sits on the cusp of "oversold" territory, meaning it could be due for a short-term bounce. Year-to-date, the equity is up 2.6%.

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