PepsiCo
PEP
$137.12
-1.66%
PepsiCo is a global leader in snacks and beverages, owning iconic brands such as Pepsi, Mountain Dew, Gatorade, Lay's, Cheetos, and Doritos, with convenience foods accounting for approximately 58% of total revenue and beverages making up the rest. The company dominates the global savory snacks market and ranks as the second-largest beverage provider worldwide, behind Coca-Cola, with a vast manufacturing and distribution network. The current investor narrative centers on PepsiCo's recent earnings beat in Q2 2026, where revenue grew 6.4% year-over-year, yet the stock has fallen to near its 52-week low due to North American volume declines and concerns about dividend sustainability. The stock's defensive nature and high dividend yield are attracting income-focused investors, but the market is debating whether the volume weakness is temporary or signals deeper structural challenges.…
PEP
PepsiCo
$137.12
Related headlines
PEP 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on PepsiCo's 12-month outlook, with a consensus price target around $155.73 and implied upside of +13.6% versus the current price.
Average Target
$155.73
0 analysts
Implied Upside
+13.6%
vs. current price
Analyst Count
—
covering this stock
Price Range
$124 - $183
Analyst target range
PepsiCo is covered by 22 analysts, with a consensus recommendation of 'hold' (mean rating 2.67 on a 1-5 scale where 1 is strong buy). The average target price is $155.73, implying 13.6% upside from the current price of $137.12, which suggests analysts see value but not a compelling buy. The distribution shows a mix of hold ratings (e.g., Wells Fargo, Barclays, Morgan Stanley) and a few bullish calls (UBS Buy, BNP Paribas Outperform), but notably Citigroup downgraded from Buy to Neutral on July 10, 2026, reflecting caution. The target price range spans from a low of $124.00 to a high of $183.00, a spread of 47.6% relative to the average, indicating high uncertainty about the stock's future. The low target of $124 implies a 9.6% downside from current levels and likely assumes continued volume declines and margin compression, while the high target of $183 assumes a successful turnaround in North American volumes and margin expansion. The wide dispersion and recent downgrades suggest that conviction is low, and the stock may remain range-bound until clearer signs of a volume recovery emerge.
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PEP Technical Analysis
PepsiCo is in a sustained downtrend, with the stock declining 5.7% over the past year while the S&P 500 gained 18.4%, resulting in a negative relative strength of -24.1% on a 1-year basis. The current price of $137.12 sits at just 80% of its 52-week range (low $134.65, high $171.48), near the bottom, suggesting the stock is oversold and potentially offering a value opportunity, but also reflecting persistent selling pressure. The 52-week low of $134.65 is a critical support level, and the stock is currently only 1.8% above it, indicating a high risk of a breakdown if that level fails. The beta of 0.368 confirms PepsiCo is significantly less volatile than the market, which is typical for a defensive consumer staple stock, but the current drawdown of -20.6% from the 52-week high is unusually severe for such a low-beta name, signaling company-specific headwinds.
Beta
0.37
0.37x market volatility
Max Drawdown
-20.6%
Largest decline past year
52-Week Range
$135-$171
Price range past year
Annual Return
-5.7%
Cumulative gain past year
| Period | PEP Return | S&P 500 |
|---|---|---|
| 1m | -3.2% | -0.5% |
| 3m | -13.0% | +4.9% |
| 6m | -6.3% | +9.7% |
| 1y | -5.7% | +18.4% |
| ytd | -3.6% | +9.0% |
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PEP Fundamental Analysis
PepsiCo's revenue trajectory remains positive but decelerating: Q2 2026 revenue of $24.18 billion grew 6.4% year-over-year, down from 7.8% growth in Q2 2025, and the trailing twelve-month revenue of $109.6 billion reflects a slowdown from prior quarters. The growth is driven by pricing and international markets, but North American beverage volumes declined, as highlighted in recent news, which is a key concern. The company's net income for Q2 2026 was $3.0 billion, up sharply from $1.26 billion in Q2 2025 (which included a large impairment), and the net margin improved to 12.4% from 5.6% a year ago, signaling a recovery in profitability. Gross margin remained stable at 54.2%, while operating margin improved to 16.6% from 16.1% in the prior year quarter, indicating effective cost management despite input cost pressures. PepsiCo's balance sheet shows a debt-to-equity ratio of 2.45, which is elevated for a consumer staple, and interest coverage of 1.75x in Q2 2026 is thin, though the trailing twelve-month free cash flow of $9.28 billion provides ample coverage for dividends and capex. The current ratio of 0.85 is below 1.0, indicating potential liquidity risk, but the company generates strong operating cash flow ($2.32 billion in Q2 2026) and has $10.3 billion in cash, mitigating near-term concerns.
Quarterly Revenue
$24.2B
2026-06
Revenue YoY Growth
+6.4%
YoY Comparison
Gross Margin
54.2%
Latest Quarter
Free Cash Flow
$9.3B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is PEP Overvalued?
Since PepsiCo has positive net income, the primary valuation metric is the P/E ratio. The trailing P/E is 23.8x, while the forward P/E is 15.3x, a significant discount that implies the market expects earnings to grow substantially in the coming year, driven by the recovery from the prior year's impairments and operational improvements. Compared to the industry average P/E of 22x (estimated from sector data), PepsiCo's trailing multiple is at a slight premium of 8%, but the forward multiple is at a discount of 30%, suggesting the market is pricing in a strong earnings rebound. Historically, PepsiCo's trailing P/E has ranged from 13.2x (Q1 2022) to 44.7x (Q4 2023), and the current 23.8x is near the middle of that range, indicating neither extreme overvaluation nor deep value. The P/S ratio of 2.09x is below the 5-year average of around 2.5x, further supporting the view that the stock is reasonably valued relative to sales.
PE
23.8x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 13x~45x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
15.3x
Enterprise Value Multiple
