PepsiCo (PEP) AI Stock Analysis

• Market Cap: $205.21B
• Dividend Yield: 3.7%
• Average Volume (3M): 7.91M
• Price to Earnings (P/E): 28.6
• Beta (1Y): 0.13
• Revenue Growth: 0.48%
• EPS Growth: -22.61%
• Country: US
• Employees: 319,000
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Beverages - Non-Alcoholic
• EPS (TTM): 2.29
• Shares Outstanding: 1,367,340,100
• 10 Day Avg. Volume: 8,768,704
• 30 Day Avg. Volume: 7,908,288
• PEG Ratio: 3.68
• Price to Book (P/B): 11.57
• Price to Sales (P/S): 2.27
• P/FCF Ratio: 29.04
• Enterprise Value/Market Cap: 1.19
• Enterprise Value/Revenue: 3.77
• Enterprise Value/Gross Profit: 6.93
• Enterprise Value/Ebitda: 23.19
• 1Y Price Target: $157.69
• Price Target Upside: 5.07% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

• Rating: 78 Outperform
• Price Target: $165.00 ▲(9.94% Upside)

PepsiCo's strong financial performance and optimistic earnings call sentiment are the most significant factors driving the stock score. While technical indicators and valuation suggest moderate potential, the company's strategic focus on innovation and operational efficiency supports a positive outlook.

Positive Factors

Beverage Segment Growth

The growth in PepsiCo's beverage segment indicates strong brand positioning and market demand, which can drive sustained revenue growth and enhance competitive advantage.

Innovation and Brand Relaunches

By relaunching major brands and expanding product platforms, PepsiCo is likely to capture new market segments and increase consumer engagement, supporting long-term growth.

Cost Structure Improvements

Improving cost structures can enhance PepsiCo's margin sustainability, allowing for better profitability and financial health over the long term.

Negative Factors

Volume Pressures in Food Segment

The shift in promotional strategy leading to volume pressures could hinder growth in the food segment, affecting overall revenue and market share.

Challenges in China

Consumer stress in China poses a risk to PepsiCo's growth in a key international market, potentially affecting its global revenue expansion strategy.

SKU Rationalization Impact

While SKU rationalization can lead to efficiencies, it may also limit product variety, potentially impacting organic growth and consumer choice.

PepsiCo Business Overview & Revenue Model

Company Description

PepsiCo, Inc. manufactures, markets, distributes, and sells various beverages and convenient foods worldwide. The company operates through seven segments: Frito-Lay North America; Quaker Foods North America; PepsiCo Beverages North America; Latin America; Europe; Africa, Middle East and South Asia; and Asia Pacific, Australia and New Zealand and China Region. It provides dips, cheese-flavored snacks, and spreads, as well as corn, potato, and tortilla chips; cereals, rice, pasta, mixes and syrups, granola bars, grits, oatmeal, rice cakes, simply granola, and side dishes; beverage concentrates, fountain syrups, and finished goods; ready-to-drink tea, coffee, and juices; dairy products; and sparkling water makers and related products. It serves wholesale and other distributors, foodservice customers, grocery stores, drug stores, convenience stores, discount/dollar stores, mass merchandisers, membership stores, hard discounters, e-commerce retailers and authorized independent bottlers, and others through a network of direct-store-delivery, customer warehouse, and distributor networks, as well as directly to consumers through e-commerce platforms and retailers. The company was founded in 1898 and is headquartered in Purchase, New York.

How the Company Makes Money

PepsiCo generates revenue primarily through the sale of its beverages and snack products. The company's revenue model is structured around various key streams, including the sale of carbonated soft drinks, bottled water, sports drinks, fruit juices, and a wide range of snack foods. PepsiCo benefits from a strong distribution network, which includes direct store delivery, warehouse distribution, and partnerships with retailers. Significant partnerships with major grocery chains, convenience stores, and restaurants enhance its market reach. Additionally, PepsiCo invests in marketing and advertising to strengthen brand loyalty and drive sales. The company also focuses on product innovation and health-oriented offerings, which attract a growing segment of health-conscious consumers, thereby expanding its revenue potential.

PepsiCo Financial Statement Overview

Summary

PepsiCo's financial statements reflect a well-managed company with strong profitability and cash generation. Despite some fluctuations in revenue growth and a decline in return on equity, the company maintains financial stability through efficient operations and a balanced capital structure.

Income Statement

PepsiCo has shown strong profitability with a consistent gross profit margin around 54% and a net profit margin around 8% over the periods. The company has seen moderate revenue growth of 3.7% from 2022 to 2023, and a slight decline of 0.1% TTM (Trailing-Twelve-Months). EBIT and EBITDA margins are solid, though there was a decline in EBIT margin TTM. Overall, PepsiCo's income statement reflects stability and efficiency in its operations.

Balance Sheet

PepsiCo maintains a moderate debt-to-equity ratio of approximately 2.8, indicating a balanced approach to leveraging. The company has a stable equity ratio of around 17.5%, suggesting a solid capital structure. However, the return on equity has decreased from 49% in 2024 to 41% TTM, reflecting a need for improved profitability relative to equity capital. The balance sheet demonstrates financial stability with a focus on maintaining shareholder value.

Cash Flow

PepsiCo's cash flow is robust, with a strong operating cash flow to net income ratio around 1.6, indicating efficient cash generation from operations. The free cash flow has grown by approximately 19.2% from 2023 to 2024, though it decreased by 10.4% TTM. The free cash flow to net income ratio is healthy, suggesting effective capital expenditure management. Overall, the cash flow statement highlights PepsiCo's strong cash generation capabilities and efficient capital allocation.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2019	Dec 2018
Income Statement
Total Revenue	64.58B	91.85B	91.47B	86.39B	67.16B	64.66B
Gross Profit	35.11B	50.11B	49.59B	45.82B	37.03B	35.28B
EBITDA	10.49B	16.68B	15.75B	14.92B	13.09B	12.81B
Net Income	5.70B	9.58B	9.07B	8.91B	7.31B	12.52B
Balance Sheet
Total Assets	106.56B	99.47B	100.50B	92.19B	78.55B	77.65B
Cash, Cash Equivalents and Short-Term Investments	8.66B	9.27B	10.00B	5.35B	5.74B	8.99B
Total Debt	50.85B	44.95B	44.66B	39.55B	32.51B	32.32B
Total Liabilities	87.02B	81.30B	81.86B	74.91B	63.68B	63.05B
Stockholders Equity	19.39B	18.04B	18.50B	17.15B	14.79B	14.52B
Cash Flow
Free Cash Flow	5.47B	7.19B	7.92B	5.60B	5.42B	6.13B
Operating Cash Flow	5.47B	12.51B	13.44B	10.81B	9.65B	9.41B
Investing Cash Flow	-5.24B	-5.47B	-5.50B	-2.43B	-6.44B	4.56B
Financing Cash Flow	0.00	-7.56B	-3.01B	-8.52B	-8.49B	-13.77B

PepsiCo Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 150.08
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PEP, the sentiment is Positive. The current price of 150.08 is above the 20-day moving average (MA) of 141.60, above the 50-day MA of 143.66, and above the 200-day MA of 140.00, indicating a bullish trend. The MACD of 0.24 indicates Negative momentum. The RSI at 65.42 is Neutral, neither overbought nor oversold. The STOCH value of 65.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PEP.

PepsiCo Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MNST	80 Outperform	$67.98B	43.47	24.10%	―	3.70%	-0.53%
PEP	78 Outperform	$205.21B	28.55	37.19%	3.70%	0.48%	-22.61%
KO	74 Outperform	$288.52B	23.75	44.76%	3.01%	1.34%	14.67%
CCEP	74 Outperform	$40.50B	24.21	17.99%	2.53%	9.65%	-4.26%
CELH	71 Outperform	$15.66B	167.36	7.91%	―	11.85%	-64.69%
KDP	67 Neutral	$35.07B	22.91	6.18%	3.56%	4.63%	-28.22%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%