PepsiCo, Inc. PEP
PepsiCo at $140.62 trades at an 18.4x P/E and 12.6x EV/EBITDA—roughly 37% and 39% below peer medians of 29.2x and 20.6x respectively—a discount that overstates the operational deterioration. FY2025 revenue grew 2.3% to $93.9B with operating income up 4.7% to $13.5B and free cash flow improving to $7.67B; the EPS decline to $6.00 from $6.95 is driven by rising interest costs on $49.9B of debt, not core business decay.
Smart money has improved for five consecutive quarters from -0.067 to 0.146 with fund count rising from 43 to 67, and the MACD histogram has turned positive while price holds above the 50-day MA, suggesting the post-earnings selloff may be exhausting.
What could go wrong
- Debt burden. Total debt rose to $49.9B in FY2025 from $44.9B in FY2024, and interest costs are the primary driver of the EPS decline from $6.95 to $6.00; further rate or refinancing pressure could compound the drag.
- North America demand weakness. Recent news highlights weak NA demand, softer volumes, and margin headwinds; if the foods volume recovery flagged in August news proves temporary, revenue growth could stall again.
- Competitive gap with KO. Post-Q2 commentary suggests a widening near-term operating outlook gap between KO and PEP, which could keep the valuation discount persistent rather than mean-reverting.
- Insider net selling. Over 24 months insiders net sold 502K shares (-$1.53M), and recent activity is dominated by non-open-market code J transactions rather than meaningful open-market buying.
What would change my mind
Where this comes from: peer_relative · peer_relative · FMP fundamentals FY2025 vs FY2024 · FMP fundamentals FY2025 vs FY2024. Orin's read on PEP; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All PEP filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Vanguard Capital Management | $12.1B | 0.3% of fund |
| State Street | $8.2B | 0.2% of fund |
| Invesco | $5.8B | 0.5% of fund |
| Vanguard Portfolio Management | $5.0B | 0.2% of fund |
| Charles Schwab Investment Management | $4.9B | 0.7% of fund |
| Geode Capital Management | $4.7B | 0.3% of fund |
156 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 97 Form 4 filings, net −$1.5M. Of the 50 on hand, 0 were open-market purchases and 4 sales— the rest are grants, option exercises and tax withholding.
Ask Orin about PEP
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Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 17.0× | 25.8× | 38.3× |
| EV/EBITDA | 11.8× | 17.1× | — |
| P/S | 1.84× | 2.55× | — |
| P/B | 8.0× | 12.6× | — |
Its P/E sits below all 5 of the last 5 years (−2.72σ from its own mean).
9.7%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $7.7B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$154
$134 – $176 · +18% against today's price
- 16 buy or overweight
- 29 hold
- 1 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| PEPPepsiCo, Inc. | $178B | 17.0× | 11.8× | 54.0% | 10.8% | 50% |
| KDPKeurig Dr Pepper Inc. | $43B | 31.9× | 21.0× | 49.4% | 7.1% | 6% |
| KOThe Coca-Cola Company | $379B | 26.5× | 20.7× | 61.9% | 28.6% | 43% |
| MNSTMonster Beverage Corporation | $86B | 40.3× | 28.1× | 55.5% | 23.1% | 25% |
| PMPhilip Morris International Inc. | $297B | 27.4× | 18.7× | 67.5% | 25.6% | -112% |
The median is of the 4 peers listed above and nothing else — check it against the column. This company trades 42.6% below it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $222 | $144.06 · +54% | 2026-06-10 |
| Levered DCF | $175 | $144.06 · +21% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.