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PepsiCo Inc PEP

Morningstar Rating
$169.48 +1.98 (1.18%)
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Company Report

Snack and Beverage Innovation Continue to Fuel Growth at Wide-Moat PepsiCo

Following years of anemic growth due to operational missteps and underinvestments, management has worked to right PepsiCo’s ship, even amid covid-19-related disruptions and inflation. But we think there is more room to go, as the firm benefits from secular tailwinds in the snack business, growth initiatives in select attractive beverage subcategories (such as energy drinks) and regional markets (Latin America, Africa, and Asia Pacific), and an integrated business model facilitating more effective commercialization.

Price vs Fair Value

PEP is trading within a range we consider fairly valued.
Price
$169.48
Fair Value
$259.00
Uncertainty
Low
1-Star Price
$239.00
5-Star Price
$766.20
Economic Moat
Zbj
Capital Allocation
Krmtmlrch

Bulls Say, Bears Say

Bulls

Demographic and lifestyle shifts could further fuel snack consumption globally beyond our expectations.

Bears

Shifting consumer preference to healthier snacks and beverages may impede the firm’s ability to pass on higher costs in price increases thus weighing on margins and returns.

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News

Trading Information

Previous Close Price
$167.50
Day Range
$168.21169.70
52-Week Range
$155.83196.88
Bid/Ask
$169.47 / $170.00
Market Cap
$232.95 Bil
Volume/Avg
33,969 / 5.9 Mil

Key Statistics

Price/Earnings (Normalized)
21.98
Price/Sales
2.53
Dividend Yield (Trailing)
2.99%
Dividend Yield (Forward)
2.99%
Total Yield
3.41%

Company Profile

PepsiCo is a global leader in snacks and beverages, owning well-known household brands including Pepsi, Mountain Dew, Gatorade, Lay’s, Cheetos, and Doritos, among others. The company dominates the global savory snacks market and also ranks as the second-largest beverage provider in the world (behind Coca-Cola) with diversified exposure to carbonated soft drinks, or CSD, as well as water, sports, and energy drink offerings. Convenience foods account for approximately 55% of its total revenue, with beverages making up the rest. Pepsi owns the bulk of its manufacturing and distribution capacity in the United States and overseas. International markets make up 40% of total sales and one third of operating profits.
Sector
Consumer Defensive
Industry
Beverages - Non-Alcoholic
Stock Style Box
Large Core
Total Number of Employees
318,000

Competitors

Valuation

Metric
PEP
GIS
KDP
Price/Earnings (Normalized)
21.9814.6517.75
Price/Book Value
12.444.061.67
Price/Sales
2.531.972.94
Price/Cash Flow
16.8112.1614.14
Price/Earnings
PEP
GIS
KDP

Financial Strength

Metric
PEP
GIS
KDP
Quick Ratio
0.660.330.20
Current Ratio
0.850.660.38
Interest Coverage
14.947.706.56
Quick Ratio
PEP
GIS
KDP

Profitability

Metric
PEP
GIS
KDP
Return on Assets (Normalized)
10.94%8.71%4.86%
Return on Equity (Normalized)
59.05%27.32%9.95%
Return on Invested Capital (Normalized)
18.39%13.78%7.37%
Return on Assets
PEP
GIS
KDP
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Beverages - Non-Alcoholic Industry Comparables

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Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
KO
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NNFSF
Nongfu Spring Co Ltd Class H Ordinary SharesYnwf$61.0 Bil
MNST
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KDP
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CCEP
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COCSF
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KOF
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CELH
Celsius Holdings IncWslfnvsYryk$16.5 Bil
PRMW
Primo Water CorpYghvrkkwKhylw$2.8 Bil

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