PepsiCo (PEP) AI Stock Analysis

• Market Cap: $204.69B
• Dividend Yield: 3.73%
• Average Volume (3M): 7.24M
• Price to Earnings (P/E): 28.5
• Beta (1Y): 0.10
• 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: 7,019,558
• 30 Day Avg. Volume: 7,239,402
• 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: 2.63
• Enterprise Value/Gross Profit: 4.86
• Enterprise Value/Ebitda: 17.07
• 1Y Price Target: $159.69
• Price Target Upside: 6.00% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14
• EPS Forecast (FY): 8.11
• Revenue Forecast (FY): $93.47B

• Rating: 78 Outperform
• Price Target: $166.00 ▲(10.19% Upside)

PepsiCo's strong financial performance, supported by robust cash flow and strategic initiatives, is a key strength. While the valuation is on the higher side, the company's innovation and strategic priorities provide a positive outlook. Technical indicators and earnings call sentiment are balanced, contributing to a solid overall stock score.

Positive Factors

Strategic Initiatives for 2026

PepsiCo's focus on accelerating organic revenue growth, improving margins, and optimizing supply chains indicates a strong commitment to long-term operational excellence and shareholder value enhancement.

Cash Flow Strength

Robust cash flow provides PepsiCo with financial flexibility, enabling strategic investments and sustaining operations even amidst economic fluctuations.

Beverage Segment Growth

Growth in the beverage segment, driven by strong brand performance, reflects PepsiCo's ability to capture market share and adapt to consumer preferences, supporting long-term revenue growth.

Negative Factors

High Leverage

High leverage can constrain PepsiCo's financial flexibility and increase risk, potentially impacting its ability to invest in growth opportunities.

Challenges in China

Economic challenges in China could hinder PepsiCo's growth in a key international market, affecting its overall global expansion strategy.

SKU Rationalization Impact

While SKU rationalization aims to improve efficiency, it may temporarily impact organic growth, posing a challenge to maintaining consistent revenue expansion.

PepsiCo Business Overview & Revenue Model

Company Description

PepsiCo, Inc. is a global food and beverage leader headquartered in Purchase, New York. The company operates in two primary sectors: beverages and snack foods. Its portfolio includes well-known brands such as Pepsi, Mountain Dew, Gatorade, Tropicana, Lay's, Doritos, and Quaker. PepsiCo's diverse product offerings cater to a wide range of consumer preferences, focusing on both traditional and healthier options, and the company has a significant presence in more than 200 countries and territories worldwide.

How the Company Makes Money

PepsiCo generates revenue through the sale of its beverages and snack foods. The company's revenue model is primarily based on product sales, with key revenue streams coming from its carbonated soft drinks, non-carbonated beverages, and a variety of snack products. PepsiCo also engages in strategic partnerships and collaborations with retailers, foodservice operators, and distributors to expand its market reach and enhance product visibility. Additionally, the company invests in marketing and promotional activities to drive brand loyalty and consumer engagement, which further contributes to its earnings. PepsiCo's ability to adapt to changing consumer preferences, including the growing demand for healthier snacks and beverages, plays a crucial role in its financial performance.

PepsiCo Financial Statement Overview

Summary

PepsiCo demonstrates strong profitability and cash generation, with stable margins and efficient operations. Despite a slight decline in return on equity and revenue growth, the company's financial stability and effective debt management position it well for future growth.

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	92.36B	91.85B	91.47B	86.40B	79.48B	70.37B
Gross Profit	50.04B	50.36B	49.83B	45.60B	42.55B	38.61B
EBITDA	14.24B	16.68B	15.21B	14.25B	14.27B	12.88B
Net Income	7.22B	9.58B	9.07B	8.91B	7.62B	7.12B
Balance Sheet
Total Assets	106.56B	99.47B	100.50B	92.19B	92.38B	92.92B
Cash, Cash Equivalents and Short-Term Investments	8.66B	9.27B	10.00B	5.35B	5.99B	9.55B
Total Debt	50.85B	44.95B	44.66B	39.55B	40.78B	44.61B
Total Liabilities	87.02B	81.30B	81.86B	74.91B	76.23B	79.37B
Stockholders Equity	19.39B	18.04B	18.50B	17.15B	16.04B	13.45B
Cash Flow
Free Cash Flow	9.29B	7.19B	7.92B	5.60B	6.99B	6.37B
Operating Cash Flow	11.76B	12.51B	13.44B	10.81B	11.62B	10.61B
Investing Cash Flow	-7.74B	-5.47B	-5.50B	-2.43B	-3.27B	-11.62B
Financing Cash Flow	-3.28B	-7.56B	-3.01B	-8.52B	-10.78B	3.82B

PepsiCo Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 150.65
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 150.65 is above the 20-day moving average (MA) of 146.41, above the 50-day MA of 145.92, and above the 200-day MA of 139.48, indicating a bullish trend. The MACD of 0.97 indicates Negative momentum. The RSI at 63.15 is Neutral, neither overbought nor oversold. The STOCH value of 85.11 is Negative, 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	$72.16B	41.27	25.54%	―	7.62%	12.77%
PEP	78 Outperform	$204.69B	28.48	37.19%	3.73%	0.48%	-22.61%
KO	75 Outperform	$297.28B	22.88	45.12%	2.89%	2.93%	25.42%
CCEP	74 Outperform	$42.25B	25.25	17.99%	2.54%	9.65%	-4.26%
CELH	71 Outperform	$11.33B	482.29	3.06%	―	55.07%	-87.01%
KDP	70 Outperform	$40.04B	25.39	6.29%	3.12%	6.77%	-29.84%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%

PepsiCo Corporate Events

PepsiCo Unveils Strategic Priorities for 2026 Growth

On December 8, 2025, PepsiCo announced its strategic priorities to enhance shareholder value, including a preliminary financial outlook for 2026. The company plans to accelerate organic revenue growth, improve core operating margins, and optimize its North American supply chain. These initiatives, supported by shareholder Elliott Investment Management, aim to drive revenue and profit growth through innovation, cost reduction, and improved operational excellence. PepsiCo expects to achieve organic revenue growth of 4 to 6 percent in 2026 and aims for significant productivity savings, with a focus on increasing cash returns to shareholders.

PepsiCo Appoints New CFO Amidst Financial Growth

On October 7, 2025, PepsiCo announced the appointment of Stephen Schmitt as Executive Vice President and Chief Financial Officer, effective November 10, 2025. Schmitt, who previously held a similar role at Walmart U.S., will succeed Jamie Caulfield, who will retire in May 2026. Additionally, PepsiCo reported its third-quarter 2025 financial results, highlighting a 2.6% increase in net revenue and a strategic focus on accelerating growth and optimizing costs. The company reaffirmed its financial guidance for the year, emphasizing resilience in its international business and improved momentum in North America.