PEP accelerates automation and productivity efforts to counter inflation and supply chain pressures in 2025.
PEP braces for a Q2 earnings drop as North America softness, inflation and global cost pressures weigh on margins.
PepsiCo's near-term results are pressured by FX, tariffs, and capex, but underlying operations and international demand remain solid. Volume growth is the key catalyst for stabilizing the stock and supporting long-term FCF and dividend growth as capex normalizes. The current P/FCF multiple offers an attractive risk-reward opportunity for long-term investors. A return to growth could provide market-beating total returns.
PepsiCo (PEP) reached $136.06 at the closing of the latest trading day, reflecting a +1.18% change compared to its last close.
PepsiCo (PEP) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
Trading at 2008-level P/E ratios, PepsiCo presents a buy-the-dip opportunity as excessive pessimism appears fully priced into the stock. Despite recent downgrades, consensus EPS growth is projected to remain stable, nearly matching the solid performance of the past decade, indicating underlying resilience. Strategic acquisitions like Poppi and Siete pivot PepsiCo towards high-growth, "better-for-you" markets, directly addressing concerns about changing consumer health preferences.
Longtime food and beverage exec Kirk Tanner was appointed as the Hershey Co.'s new CEO early on Tuesday.
PEP counters volume softness, with smart pricing, value packs and global growth to defend margins and fuel gains.
PepsiCo stock has suffered a dramatic decline, returning to lows last seen in 2020, underperforming its peers remarkably. Yet, current pessimism seems well overdone, with PEP offering a 4.2% yield and trading near decade-low valuations. Challenges like tariffs, macro uncertainty, and GLP-1 headwinds are real but not insurmountable.
PEP stock slides to a 52-week low as weak North America sales and cautious 2025 guidance weigh on investor sentiment.
PepsiCo's stock (NASDAQ:PEP) has significantly lagged this year, recording a 10% decrease, while its competitor, Coca-Cola stock (NYSE:KO), has experienced a 16% rise. This contrast is mainly attributed to the sluggish North American operations for PepsiCo. The company has encountered a decline in consumer interest for its Frito-Lay snack sector and has dealt with a substantial recall in its Quaker Foods North America branch (oatmeal).
PepsiCo's dividend yield is at a decade high, but free cash flow hasn't covered dividends in 2 of the last 3 years—this is unsustainable. Recent acquisitions, like Poppi, add pressure to Pepsi's balance sheet, making future dividend growth and sustainability uncertain if they don't deliver immediate returns. Pepsi's lower valuation multiple is justified by slowing earnings growth and a weaker free cash flow profile compared to Coca-Cola, which has stronger fundamentals.