Update on PepsiCo

Still a mid single digit compounder...

PepsiCo has underperformed dramatically since the portfolio bought it back in 2023. This post aims to review what transpired and whether it is time to add more.

Here’s the updated financials:

Simple financials (Dec 2026 estimate, USD)

• Sales: 95bn

• EBITDA: 19bn, EBIT: 15bn

• Net income: 11.5bn, EPS: $8.4

• FCF: 9.5bn (current FCF 8bn)

• Debt: 40bn, Mkt Cap 183bn

Financial Ratios (Updated in May 2025)

• ROE: 50% ROIC: 16%

• EV/EBITDA 11.8x (Dec 26)

• PER 15.9x (Dec 26)

• EBIT margin: 15%

• FCF yield: 5%

PepsiCo had a bad recent quarter with subdued revenue growth and missing its consensus EPS target of $1.5 (for the quarter). The stock is trading near its 52 week low and as such, this post serves to provide an update, redo valuation and decide if we should add. For reader’s convenience, I have included the link below to the original analysis written almost exactly 2 years ago.

Investment Idea #6 - Pepsico