Both PepsiCo, Inc. (symbol: “PEP”) and Taiwan Semiconductor Manufacturing Co., Ltd. (symbol: “TSM”) saw their stock price decline in the third quarter of 2023, according to data from multi-asset broker Exness.
PEP stock falls 6 percent
PepsiCo, Inc. (symbol ‘PEP’) share price declined by around 6 percent in the third quarter of the month. The company’s earnings report for the fiscal quarter ending September 2023 is expected to be released on Tuesday 10th of October, before the market opens. The consensus EPS is $2.18, up from $1.97 in the same quarter last year.
“As of 30/06/2023, the company’s financials are not looking great with the current ratio being at just 89 percent which means that the company has no ability to repay its short-term liabilities with the current assets currently in possession. Also, the long-term debt makes up around 46 percent of the total liabilities of the company meaning that the company is mostly operating on debt rather than income generated funds. On the other hand, the dividend yield is above 2.60 percent making the share of the beverage giant relatively attractive to long-term investors,” said Antreas Themistokleous, trading specialist at Exness.
Technical analysis shows that the price is trading at a rather interesting area on the chart consisting of the 78.6 percent of the weekly Fibonacci retracement and the lower band of the Bollinger bands. Both of these technical indicators could act as a support on the price and cause some minor correction to the upside in the near short term. If this scenario plays out then it is possible to see some resistance around the $180 area which is made up of the psychological resistance of the round number, the previous high of late August, and is also just above the 61.8 percent of the weekly Fibonacci retracement.
TSM shares lost 17 percent
Meanwhile, the shares of Taiwan Semiconductor Manufacturing Company Limited (symbol ‘TSM’) have incurred losses of around 17 percent through the last quarter. The company’s earnings report for the fiscal quarter ending September 2023 is expected to be released on Thursday 12th of October. The consensus EPS is $1.15, against $1.79 in the same quarter last year.
“Despite the recent decline in the share price, the company has an enviable financial image to display with a 15 percent decrease year over year of its long-term debt, the total assets outweighing the total liabilities at a ratio of almost 3: 1 and a current ratio at an outstanding 242 percent. The trailing annual dividend yield is at 13.43 percent while the payout ratio is just above 30 percent. This means that long-term investors get a decent return on their share ownership while the company is keeping the majority of its income (70 percent) to invest in expanding and growing,” said Antreas Themistokleous, a trading specialist at Exness.
From the technical analysis perspective, the price broke below the recent triangle formation in early September and is currently trading below all the technical indicators of moving averages and the bearish trend line. The combination of the oversold Stochastic oscillator and the lower band of the Bollinger bands acting as a support on the price might give way to some correction to the upside in the near short term. If this comes to be true then the first point of resistance might be seen around the $88 price area which is the inside resistance of the price reaction in mid-May and the second point of resistance around $92 price area which consists of the 61.8 percent of the weekly Fibonacci retracement level and the 50-day moving average.
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