PepsiCo (PEP) AI Stock Analysis

• Market Cap: $193.08B
• Dividend Yield: 3.91%
• Average Volume (3M): 7.95M
• Price to Earnings (P/E): 25.8
• Beta (1Y): 0.19
• Revenue Growth: -0.34%
• EPS Growth: -20.51%
• Country: US
• Employees: 319,000
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Beverages - Non-Alcoholic
• EPS (TTM): 2.12
• Shares Outstanding: 1,369,077,100
• 10 Day Avg. Volume: 7,066,568
• 30 Day Avg. Volume: 7,954,853
• PEG Ratio: 3.70
• Price to Book (P/B): 11.64
• Price to Sales (P/S): 2.29
• P/FCF Ratio: 29.20
• Enterprise Value/Market Cap: 1.16
• Enterprise Value/Revenue: 2.43
• Enterprise Value/Gross Profit: 4.47
• Enterprise Value/Ebitda: 15.51
• 1Y Price Target: $157.15
• Price Target Upside: 10.54% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

• Rating: 74 Outperform
• Price Target: $159.00 ▲(11.84% Upside)

PepsiCo's strong financial performance and cash generation capabilities are the most significant factors driving its stock score. The company's strategic initiatives and productivity improvements, highlighted in the earnings call, contribute positively. However, technical analysis indicates potential short-term weakness, and the high P/E ratio suggests valuation concerns. Overall, PepsiCo is positioned well for long-term growth, but investors should be mindful of current market conditions and valuation metrics.

Positive Factors

Cash Generation

PepsiCo's ability to generate strong cash flow supports its financial stability and capacity for reinvestment, ensuring long-term growth.

International Growth

PepsiCo's international growth, especially in emerging markets, provides a durable revenue stream and offsets domestic market challenges.

Productivity Initiatives

Enhanced productivity through technology and cost optimization strengthens PepsiCo's competitive edge and operational efficiency.

Negative Factors

North America Market Challenges

Struggles in the North American market could hinder revenue growth and require strategic adjustments to maintain market share.

China Market Weakness

Weak performance in China may impact PepsiCo's growth in a key international market, necessitating strategic focus to improve results.

Volume Decline Concerns

Potential volume declines could affect revenue stability and require adjustments in marketing and promotional strategies.

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 demonstrates strong profitability and cash generation, with stable margins and efficient operations. Despite some fluctuations in revenue growth and a decline in return on equity, the company maintains financial stability through 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 2021	Dec 2020
Income Statement
Total Revenue	91.75B	91.85B	91.47B	86.39B	79.47B	70.37B
Gross Profit	49.94B	50.11B	49.59B	45.82B	42.40B	38.58B
EBITDA	14.39B	16.68B	15.75B	14.92B	14.90B	13.22B
Net Income	7.55B	9.58B	9.07B	8.91B	7.62B	7.12B
Balance Sheet
Total Assets	105.34B	99.47B	100.50B	92.19B	92.38B	92.92B
Cash, Cash Equivalents and Short-Term Investments	7.97B	9.27B	10.00B	5.35B	5.99B	9.55B
Total Debt	51.38B	47.75B	44.66B	39.55B	40.78B	44.61B
Total Liabilities	86.79B	81.30B	81.86B	74.91B	76.23B	79.37B
Stockholders Equity	18.42B	18.04B	18.50B	17.15B	16.04B	13.45B
Cash Flow
Free Cash Flow	7.06B	7.19B	7.92B	5.60B	6.99B	6.37B
Operating Cash Flow	12.19B	12.51B	13.44B	10.81B	11.62B	10.61B
Investing Cash Flow	-8.14B	-5.47B	-5.50B	-2.43B	-3.27B	-11.62B
Financing Cash Flow	-2.79B	-7.56B	-3.01B	-8.52B	-10.78B	3.82B

PepsiCo Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 142.17
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 142.17 is below the 20-day moving average (MA) of 143.58, below the 50-day MA of 143.51, and above the 200-day MA of 140.62, indicating a neutral trend. The MACD of -0.73 indicates Positive momentum. The RSI at 47.47 is Neutral, neither overbought nor oversold. The STOCH value of 38.80 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	63.40B	40.55	―	―	3.70%	-0.53%
PEP	74 Outperform	$193.08B	25.85	39.88%	3.91%	-0.34%	-20.51%
KO	74 Outperform	285.98B	23.64	42.62%	3.03%	1.34%	14.67%
CCEP	74 Outperform	41.36B	24.62	16.70%	2.47%	9.65%	-4.26%
CELH	71 Outperform	13.38B	143.04	6.30%	―	11.85%	-64.69%
KDP	67 Neutral	35.66B	23.51	6.15%	3.50%	4.63%	-28.22%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%