Wide-Moat PepsiCo Delivers Stellar Q4, Focuses on Organic Expansion in 2023; Shares Fairly Valued

The strong fourth-quarter results from wide-moat PepsiCo reinforced our confidence in the firm’s growth strategies around brand investment, product innovation, and channel expansion. The firm delivered a 15% increase in organic revenue (powered by an 18% snack sale expansion), and 10% growth in adjusted EPS, slightly ahead of our 9% and 5% respective estimates. After incorporating the better-than-expected results, we plan to raise our $170 fair value estimate by a low-single-digit percentage and view the shares as fairly valued.