PepsiCo (PEP) AI Stock Analysis

• Market Cap: $231.70B
• Dividend Yield: 3.91%
• Average Volume (3M): 8.43M
• Price to Earnings (P/E): 28.2
• Beta (1Y): 0.07
• 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): 2.26
• Shares Outstanding: 1,366,649,000
• 10 Day Avg. Volume: 6,561,510
• 30 Day Avg. Volume: 8,427,855
• PEG Ratio: -1.72
• Price to Book (P/B): 9.66
• Price to Sales (P/S): 2.10
• P/FCF Ratio: 25.69
• Enterprise Value/Market Cap: 1.17
• Enterprise Value/Revenue: 2.90
• Enterprise Value/Gross Profit: 5.35
• Enterprise Value/Ebitda: 18.90
• 1Y Price Target: $172.93
• Price Target Upside: 2.22% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 16
• EPS Forecast (FY): 8.63
• Revenue Forecast (FY): $98.55B

• Rating: 70 Outperform
• Price Target: $183.00 ▲(8.18% Upside)
• Action: Upgraded Date: 02/12/26
• Date: Action: Upgraded 02/12/26

The score is driven primarily by solid underlying financial quality (durable margins and reliable cash generation) tempered by leverage and 2025 pressure on growth and free cash flow. Technicals are strong but look overextended, and valuation is a headwind due to a higher P/E despite an attractive dividend. Earnings-call guidance was constructive with clear near-term levers, offset by identifiable category and execution risks.

Positive Factors

Durable margins

Consistent mid‑50% gross margins and resilient operating profitability indicate durable pricing power and cost structure. This margin base supports sustainable operating cash flow, funds reinvestment in innovation and marketing, and helps the company withstand commodity or input cost cycles over months.

Reliable cash generation

Steady operating cash flow and positive annual free cash flow provide long‑term financial flexibility to fund dividends, share buybacks, M&A, and productivity investments. Even with 2025 softness, the company’s recurring cash conversion supports durable capital returns and strategic reinvestment over the medium term.

Portfolio scale & commercialization

A broad brand portfolio across beverages and snacks, active global relaunches and successful new products plus early gains from integrated distribution increase shelf presence and category share. Scale and multi‑category reach sustain durable consumer access and commercialization advantages over months.

Negative Factors

High leverage

Material leverage (debt >2x equity) limits strategic flexibility and raises refinancing and interest‑rate sensitivity. With elevated debt levels, the company has less cushion to accelerate investment or absorb shocks, making multi‑quarter strategic execution and discretionary spend riskier if macro rates remain high.

Choppy free cash flow conversion

A marked FCF decline and only moderate cash conversion versus net income reduce available internal funding for M&A, reinvestment and shareholder returns. If underlying earnings growth stalls, the company’s ability to sustain discretionary investments or offset rising debt service costs could be constrained over the coming quarters.

Execution & category demand risks

Structural risks—shifts in consumption from GLP‑1 adoption, underperforming brands, and ongoing distributor/IT integration work—create execution and demand uncertainty. These factors can depress volumes or delay synergies, pressuring medium‑term growth and margin recovery across key channels and regions.

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 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

Strong, resilient profitability and consistent operating cash flow support a solid base, but 2025 showed slower growth, margin compression, a notable free-cash-flow decline, and meaningful leverage that constrains flexibility.

Income Statement

PepsiCo shows strong and consistent profitability, with gross margins holding in the mid‑50% range and operating profitability remaining healthy. Revenue has grown steadily since 2020, but the most recent year (2025) slowed to low-single-digit growth and profitability softened versus 2024 (lower operating and net margins). Overall, the income profile is resilient for the industry, but the latest-year margin compression and slower growth temper the score.

Balance Sheet

The balance sheet reflects meaningful leverage: debt is more than double equity across the period (debt-to-equity ~2.3–2.5 recently), which reduces flexibility if rates stay higher or growth slows. Offsetting that, returns on equity are very strong, signaling efficient capital use and a durable earnings base. Net-net: strong profitability supports the capital structure, but leverage remains the key constraint.

Cash Flow

Cash generation is solid with consistent operating cash flow, and free cash flow remains positive each year. However, free cash flow has been choppy and declined notably in 2025 (down ~17%), and cash conversion versus accounting earnings is only moderate (free cash flow running at roughly 52%–63% of net income over the period). The company’s cash flow is reliable, but the recent decline and middling conversion keep the score in the mid-range.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	93.92B	91.85B	91.47B	86.39B	79.47B
Gross Profit	50.86B	50.11B	49.59B	45.82B	42.40B
EBITDA	14.39B	16.68B	15.75B	14.92B	14.90B
Net Income	8.24B	9.58B	9.07B	8.91B	7.62B
Balance Sheet
Total Assets	107.40B	99.47B	100.50B	92.19B	92.38B
Cash, Cash Equivalents and Short-Term Investments	9.53B	9.27B	10.00B	5.35B	5.99B
Total Debt	49.90B	44.95B	44.66B	39.55B	40.78B
Total Liabilities	86.85B	81.30B	81.86B	74.91B	76.23B
Stockholders Equity	20.41B	18.04B	18.50B	17.15B	16.04B
Cash Flow
Free Cash Flow	7.67B	7.19B	7.92B	5.60B	6.99B
Operating Cash Flow	12.09B	12.51B	13.44B	10.81B	11.62B
Investing Cash Flow	-6.88B	-5.47B	-5.50B	-2.43B	-3.27B
Financing Cash Flow	-4.98B	-7.56B	-3.01B	-8.52B	-10.78B

PepsiCo Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 169.17
• 50DMA: Positive
• 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 169.17 is above the 20-day moving average (MA) of 163.58, above the 50-day MA of 152.42, and above the 200-day MA of 142.47, indicating a bullish trend. The MACD of 4.83 indicates Positive momentum. The RSI at 67.90 is Neutral, neither overbought nor oversold. The STOCH value of 77.23 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	82 Outperform	$83.57B	48.62	25.54%	―	7.62%	12.77%
KO	76 Outperform	$347.15B	26.56	45.97%	2.92%	2.93%	25.42%
PEP	70 Outperform	$231.70B	28.25	42.86%	3.91%	0.48%	-22.61%
CCEP	69 Neutral	$48.40B	22.42	24.42%	2.52%	9.65%	-4.26%
CELH	69 Neutral	$13.07B	556.77	3.06%	―	55.07%	-87.01%
KDP	69 Neutral	$42.16B	20.34	8.36%	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 Issues €2.5 Billion Euro-Denominated Senior Notes

On February 4, 2026, PepsiCo announced a euro-denominated senior notes offering comprising €500 million in floating rate notes due 2028, €650 million of 3.300% notes due 2034, €850 million of 3.700% notes due 2038 and €500 million of 4.150% notes due 2047, which were issued on February 11, 2026. The unsecured notes, ranking pari passu with PepsiCo’s other senior debt, raised net proceeds of about €2.482 billion that the company has earmarked for general corporate purposes, including repaying commercial paper, underscoring its ongoing use of long-term euro funding to manage its balance sheet and liquidity profile.

The offering was led by a syndicate of international banks acting as joint bookrunners, and the notes carry a mix of fixed and floating coupons with standard redemption features and events of default. By locking in long-dated euro funding at defined interest rates and diversifying its maturity profile out to 2047, PepsiCo reinforces its access to European capital markets and signals continued emphasis on prudent liability management, which is relevant for bondholders and other creditors.

The most recent analyst rating on (PEP) stock is a Buy with a $180.00 price target. To see the full list of analyst forecasts on PepsiCo stock, see the PEP Stock Forecast page.

PepsiCo Announces Leadership Change Effective December 28

On December 15, 2025, PepsiCo announced a significant leadership change, with Steven Williams, the current CEO of North America, transitioning to the role of Executive Vice President & Vice Chairman, Global Chief Commercial Officer & Corporate Affairs, effective December 28, 2025. This move is expected to impact the company’s global commercial strategy and corporate affairs, potentially influencing its market positioning and stakeholder relations.

The most recent analyst rating on (PEP) stock is a Hold with a $144.00 price target. To see the full list of analyst forecasts on PepsiCo stock, see the PEP Stock Forecast page.

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.

The most recent analyst rating on (PEP) stock is a Buy with a $163.00 price target. To see the full list of analyst forecasts on PepsiCo stock, see the PEP Stock Forecast page.