PepsiCo logged a -1.5% change during today's evening session, and is now trading at a price of $187.46 per share.
PepsiCo returned gains of 755.0% last year, with its stock price reaching a high of $196.88 and a low of $160.98. Over the same period, the stock underperformed the S&P 500 index by -371.0%. As of April 2023, the company's 50-day average price was $185.7. PepsiCo, Inc. manufactures, markets, distributes, and sells various beverages and convenient foods worldwide. Based in Purchase, NY, the large-cap Consumer Staples company has 315,000 full time employees. PepsiCo has offered a 2.5% dividend yield over the last 12 months.
A Steady Stream of Strong Cash Flows With a Flat Trend:
| 2020-02-13 | 2021-02-11 | 2022-02-10 | 2023-02-09 | |
|---|---|---|---|---|
| Revenue (MM) | $67,161 | $70,372 | $79,474 | $86,392 |
| Gross Margins | 55.1% | 54.8% | 53.4% | 53.0% |
| Operating Margins | 15.3% | 14.4% | 14.0% | 13.2% |
| Net Margins | 10.89% | 10.12% | 9.59% | 10.31% |
| Net Income (MM) | $7,314 | $7,120 | $7,618 | $8,910 |
| Net Interest Expense (MM) | -$935 | -$1,128 | -$1,863 | -$939 |
| Depreciation & Amort. (MM) | -$2,432 | -$2,548 | -$2,710 | -$2,763 |
| Earnings Per Share | $5.2 | $5.11 | $5.48 | $5.72 |
| EPS Growth | n/a | -1.73% | 7.24% | 4.38% |
| Diluted Shares (MM) | 1,407 | 1,392 | 1,389 | 1,377 |
| Free Cash Flow (MM) | $9,479 | $10,558 | $11,450 | $10,560 |
| Capital Expenditures (MM) | $170 | $55 | $166 | $251 |
| Net Current Assets (MM) | -$46,034 | -$56,365 | -$54,443 | -$53,375 |
| Current Ratio | 0.86 | 0.98 | 0.83 | 0.8 |
| Long Term Debt (MM) | $29,148 | $40,370 | $36,026 | $35,657 |
| Net Debt / EBITDA | 3.05 | 4.04 | 3.46 | 3.13 |
PepsiCo has a steady stream of strong cash flows, growing revenues and decreasing reinvestment in the business, and positive EPS growth. However, the firm suffers from slimmer gross margins than its peers and a highly leveraged balance sheet. Finally, we note that PepsiCo has weak operating margings with a stable trend.
The Market May Be Overvaluing PepsiCo's Earnings and Assets:
PepsiCo has a trailing twelve month P/E ratio of 32.5, compared to an average of 24.36 for the Consumer Staples sector. Based on its EPS guidance of $7.35, the company has a forward P/E ratio of 25.3. The 7.2% compound average growth rate of PepsiCo's historical and projected earnings per share yields a PEG ratio of 4.53. This suggests that these shares are overvalued. Furthermore, PepsiCo is likely overvalued compared to the book value of its equity, since its P/B ratio of 14.6 is higher than the sector average of 4.29. The company's shares are currently trading 375.4% above their Graham number.
PepsiCo Has an Average Rating of Buy:
The 19 analysts following PepsiCo have set target prices ranging from $163.15 to $199.41 per share, for an average of $184.03 with a buy rating. As of April 2023, the company is trading 0.9% away from its average target price, indicating that there is an analyst consensus of little upside potential.
PepsiCo has a very low short interest because 0.8% of the company's shares are sold short. Institutions own 75.9% of the company's shares, and the insider ownership rate stands at 0.15%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 9% stake in the company is worth $24,629,260,331.
