PepsiCo - consolidation is potentially in place and the share price closed yesterday just above the 23.6% Fib. Suggesting a bullish shift may be in play.

Financials

In this instance, we’re evaluating PepsiCo from a financial and technical perspective. Within the income statement, in the fiscal year of 2021, PepsiCo finished the year with $79.4bn in revenue and $42.4bn in gross profit meaning they currently operate on a 53% profit margin. After expenses and tax, the net came in at $7.6bn. With this in mind, EBITDA rose $1bn which assisted in the increase of $0.37 to $5.51 for the EPS in 2021. Over to the balance sheet, cash-on-hand has declined over the recent years, falling $3.5bn from the previous year and $13.5bn since 2017. Nevertheless, total assets remain strong with just over $92bn and the company managed to reduce its total liabilities by $3bn. Hence, equity grew by almost $3bn year-on-year. PepsiCo continues to operate above the pre-pandemic level, and now it is at its highest level when compared over the last decade. Excluding the 2018 year where profits soared due to higher income from continuous operations and lower operating expenses.

Technicals

Looking at the stock on the daily interval, we can see that PepsiCo’s shares are currently trading at around $171.85 a share. Applying the Fibonacci retracement to the chart, we can see that consolidation is potentially in place and the share price closed yesterday just above the 23.6% Fib ($171.75). This might suggest that a bullish shift could now be in play, therefore, the next resistance levels sit at $174.64 (38.2%) then at $176.98 (50%) then at $179.31 (61.8%). A break above the 61.8% Fib may create a build-up of momentum and see the price hike towards the 76.4% Fib, and even the 100% Fib. However, this is a longer-term outlook. On the other hand, if this is a false breakout, past resistance is now acting as minor support at $171.75 (23.6%). Followed by this is the major support resting at $167.08 (0%). A break below this level could see the price decline as far as $160 a share (med-term), MACD has turned positive but RSI is trailing behind, although it has just turned neutral as it reads 45.