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PepsiCo Inc PEP

Morningstar Rating
$167.09 −0.56 (0.33%)
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Company Report

 PepsiCo Earnings:  Sharper Focus on Value and Away-From-Home Channels to Buoy US Performance  

We plan to maintain our $176 fair value estimate for wide-moat PepsiCo after absorbing its second-quarter results. Organic sales rose 2% led by international expansion while EPS rose 13% benefiting from cost savings and a lower tax rate. Despite near-term headwinds from the Quaker recalls and consumer belt-tightening in the US, we think PepsiCo remains poised to bolster its competitive standing in beverages and snacks by leveraging marketing and product initiatives. We are maintaining our 2024 forecasts for sales and EPS to grow by 4% and 7%, respectively, as well as our 10-year projection for 5% sales CAGR and 17% average operating margins. Shares look undervalued.

Price vs Fair Value

PEP is trading within a range we consider fairly valued.
Price
$167.66
Fair Value
$539.00
Uncertainty
Low
1-Star Price
$546.00
5-Star Price
$646.80
Economic Moat
Bkhp
Capital Allocation
Msrmsjgq

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
$167.65
Day Range
$167.07168.30
52-Week Range
$155.84192.38
Bid/Ask
$167.04 / $167.11
Market Cap
$229.54 Bil
Volume/Avg
458,068 / 5.3 Mil

Key Statistics

Price/Earnings (Normalized)
21.17
Price/Sales
2.52
Dividend Yield (Trailing)
3.07%
Dividend Yield (Forward)
3.23%
Total Yield
3.51%

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 US 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)
21.1714.2918.87
Price/Book Value
11.853.841.81
Price/Sales
2.521.893.08
Price/Cash Flow
16.9711.3714.57
Price/Earnings
PEP
GIS
KDP

Financial Strength

Metric
PEP
GIS
KDP
Quick Ratio
0.600.340.25
Current Ratio
0.830.650.51
Interest Coverage
14.887.045.25
Quick Ratio
PEP
GIS
KDP

Profitability

Metric
PEP
GIS
KDP
Return on Assets (Normalized)
11.02%8.45%4.95%
Return on Equity (Normalized)
58.48%27.01%10.19%
Return on Invested Capital (Normalized)
18.27%13.40%7.71%
Return on Assets
PEP
GIS
KDP
See how this stock stacks up to its competitors with Morningstar Investor

Beverages - Non-Alcoholic Industry Comparables

1-Day Chart
Name
Price
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
Coca-Cola Co
KO
PgmtjqgjxSrgxw$279.0 Bil
Monster Beverage Corp
MNST
LvwwsvwdNfzjh$49.6 Bil
Nongfu Spring Co Ltd Class H Ordinary Shares
NNFSF
Mkf$49.5 Bil
Keurig Dr Pepper Inc
KDP
CyzwzkzKqtfxbh$44.5 Bil
Coca-Cola Europacific Partners PLC
CCEP
XqmycpkdtNnqlzp$33.9 Bil
Coca-Cola Femsa SAB de CV Series L
COCSF
Zmfp$20.1 Bil
Coca-Cola Femsa SAB de CV ADR
KOF
YfrvpdnxXjd$20.1 Bil
Celsius Holdings Inc
CELH
HfjgtnfwZxchf$11.2 Bil
Primo Water Corp
PRMW
TyswsnzmXccx$3.4 Bil

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