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PepsiCo (PEP)
NASDAQ:PEP
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PepsiCo (PEP) AI Stock Analysis

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PEP

PepsiCo

(NASDAQ:PEP)

Rating:74Outperform
Price Target:
$160.00
▲(10.72%Upside)
PepsiCo receives a solid score driven by strong financial performance and effective cash generation. While there are positive signs in operational improvements and international growth, caution is warranted due to high valuation and potential challenges in key markets. The company's strategic financial management further supports its stability and growth outlook.
Positive Factors
Earnings
PepsiCo's stock rallied on a modest 2Q beat-and-raise for core EPS on smaller FX headwinds and re-affirmation of sequential improvement.
International Growth
International growth was robust, contributing positively to the overall performance with a 5.7% increase in Q2.
Negative Factors
Margin Risk
As PEP continues to navigate a tepid sales environment in North America and with heightened margin risk, the valuation multiple has been lowered.
U.S. Topline Challenges
Despite the positive developments, topline growth in the United States remains muted, with ongoing challenges.

PepsiCo (PEP) vs. SPDR S&P 500 ETF (SPY)

PepsiCo Business Overview & Revenue Model

Company DescriptionPepsiCo, Inc. is a global food and beverage leader with a diverse product portfolio that includes iconic brands such as Pepsi, Mountain Dew, Lay's, Gatorade, Tropicana, and Quaker. Operating in over 200 countries and territories, the company is organized into several key divisions: Frito-Lay North America, Quaker Foods North America, PepsiCo Beverages North America, Latin America, Europe, Africa, the Middle East and South Asia, and Asia Pacific, Australia/New Zealand and China. PepsiCo focuses on delivering convenient foods and beverages to consumers through a variety of retail and foodservice channels.
How the Company Makes MoneyPepsiCo generates revenue primarily through the sale of its wide array of food and beverage products across multiple global markets. The company's revenue model is centered around its diverse portfolio of brands, which includes both carbonated and non-carbonated beverages, savory snacks, cereals, and other food products. Key revenue streams include the retail sales of these products in supermarkets, convenience stores, and through vending machines, as well as direct sales to restaurants, schools, and other institutions. PepsiCo also benefits from strategic partnerships and distribution agreements, which enhance its market reach and accessibility. The company's earnings are influenced by consumer preferences, marketing strategies, and its ability to innovate and adapt to changing market trends.

PepsiCo Key Performance Indicators (KPIs)

Any
Any
Revenue by Segment
Revenue by Segment
Breaks down sales across different business units, indicating which areas are growing or shrinking and how diversified the company’s revenue streams are.
Chart InsightsPepsiCo's international markets are driving growth, with a notable 5% increase, despite challenges in North America. The earnings call highlights strong performance in Europe, India, and Brazil, countering subdued results from Frito-Lay North America due to consumer price sensitivity. The company is focused on operational excellence and portfolio transformation to navigate macroeconomic uncertainties and tariffs, aiming for long-term profitability. The beverage segment shows improvement, with Pepsi and Gatorade gaining market share, reflecting strategic investments in innovation and efficiency.
Data provided by:Main Street Data

PepsiCo Earnings Call Summary

Earnings Call Date:Apr 24, 2025
(Q2-2025)
|
% Change Since: 2.69%|
Next Earnings Date:Oct 02, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive outlook with significant productivity improvements, international growth, and strategic investments in technology and permissible snacks. While there are challenges in China and volume pressures in North America, the overall sentiment leans towards optimism driven by strong performance in international markets and new growth opportunities in the away-from-home segment.
Q2-2025 Updates
Positive Updates
Accelerated Productivity Initiatives
PepsiCo is expecting to deliver about 70% more productivity in the second half of the year compared to the first half, with significant contributions from Frito-Lay. The company has closed two plants and shuttered some manufacturing lines to optimize costs.
International Growth Success
PepsiCo's international business continues to be a strong focus, with mid-single-digit growth in both food and beverages. Markets like LatAm, parts of Europe, and India show robust performance.
Away-From-Home Business Growth
The away-from-home segment is a bright spot, with PBNA up high single digits. This segment represents a significant growth opportunity and is margin accretive for both beverages and snacks.
Permissible Snacks Portfolio Expansion
PepsiCo's permissible snacks business, including SunChips, PopCorners, and Simply, has grown to over $2 billion, emphasizing efforts in healthier snacking options.
Sustainable Beverages Growth
PepsiCo is focusing on no-sugar colas, energy drinks, and hydration solutions, driving share gains in beverages both in the U.S. and internationally.
Investment in Technology and Innovation
Continuous investment in technology, AI, and data to optimize productivity and drive growth in North America and globally.
Negative Updates
Challenges in China
Post-Chinese New Year, consumer demand has softened, posing a challenge in one of PepsiCo's key international markets.
North America Volume Challenges
While there is a focus on sequential improvement, the North America food business continues to face volume challenges, particularly in certain subcategories like potato chips.
Currency and Tariff Volatility
Currency fluctuations and tariffs are significant swing factors impacting earnings, although PepsiCo feels confident about its mitigating actions.
Company Guidance
During PepsiCo's Q2 2025 earnings call, the company provided guidance highlighting a significant focus on productivity initiatives and asset optimization. PepsiCo expects to generate 70% more productivity savings in the second half of the year compared to the first half, primarily from the Frito-Lay division, as the company seeks to rightsize its asset footprint. This involves closing two plants and adjusting workforce levels, complemented by savings from procurement improvements enabled by ERP system investments. Additionally, the company emphasized a multi-year horizon for enhancing productivity across its North America market, integrating technology and data to streamline operations, and leveraging global capability centers. PepsiCo aims for sequential improvement in top-line performance, targeting the lower end of its long-term growth algorithm over the next few quarters, driven by international growth and enhanced competitiveness in North America.

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. PepsiCo's ability to generate cash and manage debt effectively positions it well for future growth and shareholder value creation.
Income Statement
85
Very Positive
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
78
Positive
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
82
Very Positive
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.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue91.85B91.47B86.39B79.47B70.37B
Gross Profit50.11B49.59B45.82B42.40B38.58B
EBITDA16.68B15.75B14.92B14.90B13.22B
Net Income9.58B9.07B8.91B7.62B7.12B
Balance Sheet
Total Assets99.47B100.50B92.19B92.38B92.92B
Cash, Cash Equivalents and Short-Term Investments9.27B10.00B5.35B5.99B9.55B
Total Debt44.95B44.66B39.55B40.78B44.61B
Total Liabilities81.30B81.86B74.91B76.23B79.37B
Stockholders Equity18.04B18.50B17.15B16.04B13.45B
Cash Flow
Free Cash Flow7.19B7.92B5.60B6.99B6.37B
Operating Cash Flow12.51B13.44B10.81B11.62B10.61B
Investing Cash Flow-5.47B-5.50B-2.43B-3.27B-11.62B
Financing Cash Flow-7.56B-3.01B-8.52B-10.78B3.82B

PepsiCo Technical Analysis

Technical Analysis Sentiment
Positive
Last Price144.51
Price Trends
50DMA
132.78
Positive
100DMA
137.55
Positive
200DMA
145.68
Negative
Market Momentum
MACD
3.45
Negative
RSI
65.18
Neutral
STOCH
89.30
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 144.51 is above the 20-day moving average (MA) of 137.25, above the 50-day MA of 132.78, and below the 200-day MA of 145.68, indicating a neutral trend. The MACD of 3.45 indicates Negative momentum. The RSI at 65.18 is Neutral, neither overbought nor oversold. The STOCH value of 89.30 is Negative, 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 (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$46.01B29.9517.43%0.03%11.73%-15.34%
77
Outperform
$45.50B30.346.18%2.74%4.63%-28.22%
76
Outperform
$9.75B19.8736.83%5.00%3.21%31.84%
76
Outperform
$57.72B39.0820.00%1.47%-4.87%
74
Outperform
$197.85B26.5639.88%3.80%-0.34%-20.51%
73
Outperform
$297.68B24.5344.76%2.88%1.34%14.67%
65
Neutral
$27.20B15.73-4.29%2.57%1.03%4.90%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PEP
PepsiCo
144.51
-22.17
-13.30%
COKE
Coca-Cola Bottling Co Consolidated
111.81
-0.61
-0.54%
KO
Coca-Cola
69.10
3.96
6.08%
KDP
Keurig Dr Pepper
33.57
0.73
2.22%
MNST
Monster Beverage
60.18
9.18
18.00%
CCEP
Coca-Cola Europacific Partners
100.17
27.89
38.59%

PepsiCo Corporate Events

Private Placements and Financing
PepsiCo Announces $3.5 Billion Senior Notes Offering
Neutral
Jul 23, 2025

On July 21, 2025, PepsiCo announced the offering of $3.5 billion in senior notes with varying maturity dates and interest rates, aimed at general corporate purposes and repaying commercial paper. The issuance of these notes, managed by major financial institutions, reflects PepsiCo’s strategic financial management and potential impact on its market positioning and stakeholder interests.

The most recent analyst rating on (PEP) stock is a Hold with a $185.00 price target. To see the full list of analyst forecasts on PepsiCo stock, see the PEP Stock Forecast page.

Business Operations and Strategy
PepsiCo Announces Realignment of Reportable Segments
Neutral
Jul 17, 2025

PepsiCo announced a realignment of its reportable segments effective from the first quarter of 2025, reflecting changes in its organizational structure. This restructuring aims to streamline operations and enhance the monitoring and resource allocation by the CEO, impacting how historical segment data is reported but not altering previously reported financial statements.

The most recent analyst rating on (PEP) stock is a Hold with a $185.00 price target. To see the full list of analyst forecasts on PepsiCo stock, see the PEP Stock Forecast page.

Private Placements and FinancingBusiness Operations and Strategy
PepsiCo Enters New $5 Billion Credit Agreements
Positive
May 23, 2025

On May 23, 2025, PepsiCo terminated its previous $5 billion 364-day and five-year unsecured revolving credit agreements and simultaneously entered into new agreements of the same value with Citibank, N.A. as the administrative agent. These new credit agreements allow PepsiCo and its subsidiaries to borrow up to $5 billion in U.S. Dollars and/or Euros, with options to increase commitments and extend terms, supporting general corporate purposes. This strategic financial move enhances PepsiCo’s liquidity and flexibility, potentially impacting its market positioning and stakeholder interests.

The most recent analyst rating on (PEP) stock is a Buy with a $185.00 price target. To see the full list of analyst forecasts on PepsiCo stock, see the PEP Stock Forecast page.

Executive/Board ChangesShareholder Meetings
PepsiCo Shareholders Approve Directors, Reject ESG Proposals
Neutral
May 9, 2025

During the 2025 Annual Meeting of Shareholders held on May 7, 2025, PepsiCo announced the election of 15 directors, the ratification of KPMG LLP as its accounting firm, and the approval of executive compensation. However, shareholders voted against proposals related to non-sugar sweetener risks, racial equity audits, biodiversity risks, and sustainable packaging, indicating a focus on traditional business operations over new sustainability and social governance initiatives.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 19, 2025