PepsiCo Inc. (PEP)
Consumer · NASDAQ · US
Fundamentals
Valuation and ratings
PepsiCo Inc. trades at $139.43, close to the $160.00 our discounted cash flow model puts on the business. On this measure the market and the model broadly agree, so the interesting question is which of them is wrong.
Our moat model scores it 79 out of 100, which is a wide moat. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 18.0 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About PepsiCo Inc.
PepsiCo, Inc. engages in the manufacture, marketing, distribution, and sale of various beverages and convenient foods worldwide. The company operates through six segments: PepsiCo Foods North America; PepsiCo Beverages North America; International Beverages Franchise; Europe, Middle East and Africa; Latin America Foods; and Asia Pacific Foods. It offers cereals, chips, dips, granola bars, oatmeal, pasta, rice, and syrups and mixes; refrigerated dips and spreads; beverage concentrates, fountain syrups, and finished goods; and ready-to-drink tea and coffee products. The company also provides SodaStream sparkling water makers and related products, as well as various dairy products under the Agusha, Chudo, and Domik v Derevne brands. 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. PepsiCo, Inc. was founded in 1898 and is based in Purchase, New York.
PEP passes 4 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Smart money ownership
28 of the funds we track reported a position in their latest SEC 13F filing. Largest first:
- Ken Fisher, Fisher Asset Management, LLC$1.32B · 0.5% of book
- Cliff Asness, AQR CAPITAL MANAGEMENT LLC$909.34M · 0.4% of book
- Capital Research Global, Capital Research Global Investors$767.96M · 0.1% of book
- Arrowstreet Capital, ARROWSTREET CAPITAL, LIMITED PARTNERSHIP$481.47M · 0.3% of book
- Yacktman Asset Management, YACKTMAN ASSET MANAGEMENT LP$314.92M · 4.2% of book
A word of warning on reading these figures: a 13F reports the market value of a holding, so a fund that traded nothing at all still appears to have sold when the price fell. We found 102 companies where the standard reading gives the opposite answer. Only the share count is honest.
Common questions
Is PepsiCo Inc. (PEP) undervalued?
Against our discounted cash flow estimate of $160.00, PEP at $139.43 is 15% below fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
Which funds own PEP?
28 of the institutions we track reported a position in PEP in their most recent SEC 13F filing. A 13F is filed up to 45 days after quarter end, so it tells you what a fund held then, not what it holds now.
What is PEP's P/E ratio?
PEP trades at 18.0 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
The full research page for PEP, with financial statements, ownership detail, peer comparison and alerts, is free inside the app.
Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.