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PepsiCo (PEP)
NASDAQ:PEP
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PepsiCo
(NASDAQ:PEP)69Neutral
Positive Factors
International Growth
Significant growth potential exists internationally, with the international segment being PepsiCo's biggest growth opportunity moving forward.
Strategic Investments
PepsiCo's long-term growth drivers remain intact, with a focus on reinvesting in the business to fuel long-term growth through strategic investments.
Negative Factors
North America Challenges
The market remains sceptical of a North America recovery, given consecutive quarters of volume declines.
PepsiCo (PEP) vs. S&P 500 (SPY)
Market Cap
$211.47B
Dividend Yield3.42%
Average Volume (3M)7.31M
Price to Earnings (P/E)22.2
Beta (1Y)0.27
Revenue Growth0.42%
EPS Growth5.77%
CountryUS
Employees319,000
SectorConsumer Defensive
Sector Strength73
IndustryBeverages - Non-Alcoholic
Share Statistics
EPS (TTM)6.95
Shares Outstanding1,371,499,900
10 Day Avg. Volume8,268,722
30 Day Avg. Volume7,310,348
Financial Highlights & Ratios
PEG Ratio3.84
Price to Book (P/B)N/A
Price to Sales (P/S)2.33
Price to Cash Flow (P/CF)8.50
P/FCF Ratio8.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$166.07Price Target Upside7.70% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering16
PepsiCo Business Overview & Revenue Model
Company DescriptionPepsiCo, Inc. is a food and beverage company that owns brands like Frito-Lay, Gatorade, Pepsi-Cola, Quaker, Cheetos, Doritos, Aquafina and Tropicana. The company was founded by Donald M. Kendall, Sr. and Herman W. Lay in 1965 and is headquartered in Purchase, NY.
How the Company Makes MoneyPepsiCo generates revenue through the sale of its diverse portfolio of beverages and convenient foods. Its business model is centered around manufacturing, marketing, and distributing a wide array of products across various global markets. The company divides its operations into geographical segments, each contributing to its overall revenue. Key revenue streams include the sale of carbonated soft drinks, non-carbonated beverages, and snacks. PepsiCo also earns money through strategic partnerships, licensing agreements, and joint ventures that enhance its distribution capabilities and market penetration. Additionally, the company has a strong focus on innovation, constantly expanding its product lines to meet changing consumer preferences, which further drives its sales growth.
PepsiCo Financial Statement Overview
Summary
PepsiCo exhibits robust financial health with consistent revenue growth, strong profitability margins, and effective cash flow management. Despite high leverage, the company effectively generates returns on equity. Continued focus on managing debt levels could further enhance financial stability.Income Statement
PepsiCo shows strong revenue growth with a 5.96% increase from 2022 to 2023 and a further 0.42% increase from 2023 to 2024. Gross profit margin remains robust at 54.55% in 2024, indicating efficient cost management. The net profit margin improved to 10.43% in 2024, reflecting enhanced profitability. Solid EBIT and EBITDA margins at 14.03% show effective operational control.85
Very Positive
Balance Sheet
The balance sheet indicates a high debt-to-equity ratio of 2.46 in 2024, suggesting significant leverage. However, PepsiCo maintains a strong return on equity of 53.08%, showcasing effective utilization of equity to generate profits. The equity ratio stands at 18.14%, indicating moderate reliance on equity financing.78
Positive
Cash Flow
PepsiCo demonstrates a healthy free cash flow growth rate of 57.84% from 2023 to 2024, indicating improved cash generation. The operating cash flow to net income ratio is 1.31, showing effective conversion of net income to cash. The free cash flow to net income ratio of 1.31 highlights strong cash flow generation relative to net profits.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 91.85B | 91.47B | 86.40B | 79.47B | 70.37B | Gross Profit |
| 50.11B | 49.59B | 46.12B | 42.54B | 38.58B | EBIT |
| 12.89B | 11.99B | 11.87B | 11.45B | 10.08B | EBITDA |
| 12.89B | 15.21B | 14.25B | 14.27B | 12.88B | Net Income Common Stockholders |
| 9.58B | 9.07B | 8.91B | 7.62B | 7.12B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 9.27B | 10.00B | 5.35B | 5.99B | 9.55B | Total Assets |
| 99.47B | 100.50B | 92.19B | 92.38B | 92.92B | Total Debt |
| 44.95B | 44.66B | 39.07B | 40.33B | 44.15B | Net Debt |
| 36.44B | 34.95B | 34.12B | 34.74B | 35.97B | Total Liabilities |
| 81.30B | 81.86B | 74.91B | 76.23B | 79.37B | Stockholders Equity |
| 18.04B | 18.50B | 17.15B | 16.04B | 13.45B |
| Cash Flow | Free Cash Flow | |||
| 7.19B | 7.92B | 5.60B | 6.99B | 6.37B | Operating Cash Flow |
| 12.51B | 13.44B | 10.81B | 11.62B | 10.61B | Investing Cash Flow |
| -5.47B | -5.50B | -2.43B | -3.27B | -11.62B | Financing Cash Flow |
| -7.56B | -3.01B | -8.52B | -10.78B | 3.82B |
PepsiCo Technical Analysis
Positive
154.19
Price Trends
149.10
Positive
156.65
Negative
162.78
Negative
Market Momentum
1.56
Negative
57.99
Neutral
71.27
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 154.19 is above the 20-day moving average (MA) of 148.55, above the 50-day MA of 149.10, and below the 200-day MA of 162.78, indicating a neutral trend. The MACD of 1.56 indicates Negative momentum. The RSI at 57.99 is Neutral, neither overbought nor oversold. The STOCH value of 71.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PEP.
PepsiCo Risk Analysis
PepsiCo disclosed 28 risk factors in its most recent earnings report. PepsiCo reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
PepsiCo Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $301.89B | 28.52 | 42.77% | 2.68% | 1.96% | -0.45% | |
78 Outperform | $460.27B | 60.89 | 30.98% | 0.44% | 5.35% | 16.22% | |
78 Outperform | $84.45B | 19.07 | 17.12% | 2.72% | 1.18% | -5.47% | |
76 Outperform | $53.15B | 37.18 | 25.33% | ― | 4.94% | -4.13% | |
76 Outperform | $46.31B | 32.41 | 5.94% | 2.61% | 3.62% | -32.23% | |
69 Neutral | $211.47B | 22.18 | 53.09% | 3.42% | 0.42% | 5.77% | |
63 Neutral | $20.85B | 13.27 | -10.88% | 7.48% | 1.13% | 11.50% |
* Consumer Defensive Sector Average
Performance Comparison
PEP
PepsiCo
154.19
-4.02
-2.54%
KO
Coca-Cola
70.19
12.43
21.52%
COST
Costco
1,036.87
281.06
37.19%
KDP
Keurig Dr Pepper
33.60
5.28
18.64%
MNST
Monster Beverage
54.82
-3.07
-5.30%
MDLZ
Mondelez International
65.29
-3.68
-5.34%
PepsiCo Earnings Call Summary
Earnings Call Date: Feb 4, 2025 | % Change Since: 2.61% | Next Earnings Date: Apr 29, 2025
Earnings Call Sentiment Neutral
The call reflects a balanced outlook with strong international growth, innovation in snacks and beverages, and margin improvements, countered by challenges in North American consumer environment, volume deceleration in Frito-Lay, and financial headwinds from Forex and interest expenses.Highlights
International Growth and Margin Expansion
International business is almost a $40 billion operation, accretive to PepsiCo, showing strong growth and margin expansion. Expected to continue as a major contributor to 2025 results.
Innovation and Category Growth in Snacks
Frito-Lay is refocusing on portion control, permissible offerings, and away-from-home opportunities. Encouraged by recent category growth, with plans to innovate through new platforms and price partitions.
Beverage Margin Improvement
Continuous improvement in North America beverage margins with a clear path towards mid-teens margin driven by better pricing and focused innovations.
Energy and Functional Beverages Strategy
Energy remains a core part of the beverage growth strategy, with a focus on functional hydration and protein beverages through Gatorade, Propel, and Muscle Milk.
Lowlights
Deceleration in Frito-Lay Volumes
Volume deceleration in Frito-Lay during Q4, despite reinvestments funded by one-time gains. Efforts to regain momentum in salty and savory categories are ongoing.
North American Consumer Environment
Muted top-line growth in North America CPG industry and a subdued consumer environment. Efforts to stabilize the salty snacks category and adjust pricing strategies are in place.
Forex and Interest Expense Headwinds
A 3-point Forex impact, with the strengthened dollar, higher net interest expenses due to debt issuance at higher rates, and pension expense increases.
GLP Usage Impact Concerns
Concerns over the potential impact of increased GLP usage on the salty snacks category, though currently seen as minimal.
Company Guidance
In the call, PepsiCo provided guidance for 2025 with a focus on strategic reinvestments and maintaining robust growth. The company anticipates low-single-digit organic sales growth, driven by international markets and a gradual improvement in North America. The guidance reflects cautious optimism amid global uncertainties, with expectations of significant contributions from international operations. The EPS forecast includes considerations for currency impacts and increased net interest expenses. PepsiCo plans to continue investing in productivity programs, such as automation and digitalization, and aims to capture opportunities in price partitions and the away-from-home sector. The company remains committed to its long-term growth target of 4% to 6% organic sales growth, with high single-digit EPS growth, demonstrating confidence in its strategic initiatives and market positioning.PepsiCo Corporate Events
Executive/Board Changes
PepsiCo Appoints New Senior Vice President and Controller
Neutral
Dec 11, 2024
PepsiCo announced the appointment of Christine E. Tammara as the new Senior Vice President and Controller, succeeding Marie T. Gallagher upon her retirement in May 2025. This leadership change is part of PepsiCo’s ongoing efforts to ensure seamless transitions within its executive team, potentially impacting its financial operations and strategic direction.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.