PepsiCo PEP
What does PepsiCo do?
PepsiCo is a globally active beverage and packaged food company. The company makes, markets and sells snacks, beverages, breakfast products and beverage concentrates through wholesalers, retail, foodservice and other distribution partners. Its portfolio includes well-known brands in salty snacks, soft drinks, oat products, ready-to-drink tea and coffee, and sparkling water makers.
The company reports in several segments: Foods and Beverages in North America, international beverage franchise, Europe, Middle East and Africa, Latin America Foods and Asia Pacific Foods. In competition, PepsiCo holds a leading position, especially in salty snacks in North America and as one of the two major soft drink providers worldwide. Its strength rests on strong brands, a dense direct-store-delivery network to retailers and broad geographic diversification. Competition comes from other consumer goods companies, regional providers and private labels.
Score profile
Rank vs. Beverages - Non-Alcoholic (8 companies). 10 = top of the group, 5 = middle. Calculated from the metrics below, without AI.
Metrics compared with the industry
On profitability and quality, PepsiCo ranks in the middle in the group Beverages - Non-Alcoholic (5.3/10). On growth, the company ranks in the middle in the group Beverages - Non-Alcoholic (4.4/10). On valuation (higher = cheaper), the stock ranks above average in the group Beverages - Non-Alcoholic (7.7/10). On financial strength, PepsiCo ranks below average in the group Beverages - Non-Alcoholic (3.5/10).
| Metric | Stock | Group median | Ranking |
|---|---|---|---|
| Forward P/E | 16.6x | 19.4x | better than 69 % |
| Trailing P/E | 18.1x | 30.9x | better than 94 % |
| PEG ratio | 1.5x | 3.0x | better than 64 % |
| EV/EBITDA | 12.2x | 15.9x | better than 94 % |
| Price/sales | 2.0x | 2.8x | better than 81 % |
| Price/book | 8.8x | 8.8x | better than 57 % |
| Revenue growth | 5.6% | 12.1% | better than 31 % |
| Earnings growth | 17.4% | 12.9% | better than 56 % |
| Gross margin | 54.3% | 49.0% | better than 69 % |
| Operating margin | 16.9% | 19.4% | better than 19 % |
| Net margin | 11.1% | 13.0% | better than 44 % |
| Return on equity | 52.2% | 36.1% | better than 81 % |
| Debt/equity | 230.7% | 19.1% | better than 6 % |
| Current ratio | 0.9x | 1.7x | better than 19 % |
| Free cash flow yield | 4.6% | 3.2% | better than 81 % |
| Dividend yield | 4.1% | 2.3% | – |
| Payout ratio | 73.0% | 67.5% | – |
| Beta | 0.32 | 0.56 | – |
Valuation: what is PepsiCo worth?
Two valuation approaches – a discounted cash flow model and a valuation at the industry’s median multiples – give PepsiCo a model range of 130.04 USD to 209.39 USD per share.
22 analysts, average rating “Hold”, average price target 141.59 USD (−1.4%).
The full DCF matrix, the reverse DCF (what growth the price implies) and scenarios are part of the Pro analysis.
What the business depends on
- Sales depend on brand strength and stable demand for everyday snacks and beverages.
- The dense distribution network with direct store delivery secures shelf presence and reach among retailers and foodservice.
- Pricing power and product mix determine how well cost increases for raw materials and packaging can be passed on.
Risks
- Fluctuating prices for agricultural commodities, packaging and energy can weigh on margins.
- Changing consumer preferences and health policy interventions, such as sugar taxes, put parts of the product range under pressure.
- Currency fluctuations and political risks in international markets affect results reported in dollars.
What to look for with PepsiCo
Organic revenue growth, broken down into price and volume, shows whether growth comes from genuine demand or merely from price increases.