| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 64 | 17.0x | 17.3x | Around median | |
Growth | 52 | 6.4% | 7.1% | Around median | |
Quality | 86 | 15.8% | 4.5% | Top tier | |
Safety | 63 | 2.4x | 2.6x | Around median | |
Capital Return | 88 | 4.29% | 0.06% | Top tier | |
Momentum | 36 | -10.0% | -1.6% | Bottom tier | |
Sentiment | 85 | 13 | 3 | Top tier |
The floor: what the company is worth if growth stopped today
46% of today's price is what a buyer pays for growth that has not happened yet.
10-year US Treasury yield 4.96% as of 2026-10-22. Estimates computed from company data and analyst targets, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
PepsiCo, Inc., listed under the ticker PEP on NASDAQ, sells food, snacks, and beverages, and generates revenue by distributing these products through retail stores, convenience stores, gas stations, and out-of-home consumption channels. Its portfolio combines chips, soft drinks, and products such as Doritos protein, Naked, Siete, and poppi, alongside partnerships with Celsius and Alani Nu. In the 2026-07-09 call, management explained that international operations account for two-thirds of beverage volumes and more than 50% of food volumes; this gives the company significant geographic diversification, but does not diminish the importance of a recovery in its North American operations.
In quarter 2 of fiscal year 2026, whose results were filed on 2026-07-09, revenue reached 24.2 billion dollars, up 6.4% year over year, compared with 22.7 billion dollars in quarter 2 of fiscal year 2025, whose results were filed on 2025-07-17. Net income was 3.0 billion dollars and diluted earnings per share were 2.18 dollars, compared with net income of 1.3 billion dollars and diluted earnings per share of 0.92 dollars in the comparison period. The operating margin reached 16.6% versus 7.9%, while the gross margin was 54.2% versus 54.7%; therefore, the improvement in operating profitability was stronger than the gross margin trend. Operating cash flow was 2.3 billion dollars versus 2.0 billion dollars in the comparison period.
Performance strength varies across business segments: in the 2026-07-09 call, management described international operations as strong, while acknowledging that North American operations were weaker than expected in quarter 2 of fiscal year 2026. North American beverages face pressure from the Alani commercial arrangement, weakness in convenience store and gas station channels, and product mix, while the food business seeks to improve the returns from price reductions and expand distribution of new products. In the last 12 months through 2026-06-13, PepsiCo generated revenue of 96.9 billion dollars, net income of 10.5 billion dollars, and free cash flow of 9.3 billion dollars; however, news on 2026-10-08 about reductions in annual revenue and core earnings forecasts limits reliance on operating improvement alone.
Q2 FY2026
When: 2026-10-08
Year-over-year revenue growth at the 6.4% level
Operating margin at the 16.6% level
The median analyst price target is 139 dollars, within a range of 133 to 176 dollars across 11 analysts, and reflects growth expectations, while the industry-multiple valuation is 135 dollars, within a range of 120 to 232 dollars, based on next year's earnings at a median multiple of 14.9 across 11 companies. The discounted cash flow model estimate is 125 dollars, within a range of 95 to 174 dollars and at a discount rate of 8.9%, measuring the value of expected cash generation, while the no-growth value is 67 dollars, assuming after-tax operating profit remains constant forever at the same discount rate. Analyst price targets and the industry-multiple valuation are closer to each other than to the no-growth value, and the discounted cash flow model falls below both; this difference reflects the weight of expected growth in the targets, peer comparisons in the industry multiple, cash generation in the discounted model, and what remains if growth stops in the no-growth value. Analyst targets tend to be optimistic by nature, while the cash flow model tends to be conservative by nature, so the differences express varying assumptions and what the methods measure. The average consensus target is 145.25 dollars with a Neutral recommendation, while the valuation pillar, which measures relative valuation, ranks 5 out of 39 within the industry with a score of 90 out of 100 for the period ended 2026-06-13.
Figures in the text are as of 2026-10-08; the live price is shown at the top of the page.
Net income reached 3.0 billion dollars and the operating margin was 16.6% in quarter 2 of fiscal year 2026, whose results were filed on 2026-07-09, compared with 1.3 billion dollars and 7.9% in quarter 2 of fiscal year 2025, whose results were filed on 2025-07-17. However, management acknowledged in the 2026-07-09 call that North American performance fell short of expectations, particularly in convenience stores and gas stations. The company is working to improve combined food and beverage offerings and expand Doritos protein, Naked, and retail space. Therefore, the earnings improvement demonstrates progress at the company level, while a complete recovery in U.S. channels still requires stronger operating results.
Management stated in the 2026-07-09 call that international operations account for two-thirds of beverage volumes and more than 50% of food volumes. It pointed to resilient performance in Europe, the Middle East, Vietnam, Thailand, and China, with opportunities to improve food market share in some regions. Global food volumes also increased 3% and beverage volumes increased 2% in the first half of fiscal year 2026. This reach gives PepsiCo a broader demand base, but management also pointed to expected commodity cost pressures in Europe, the Middle East, and Africa during the second half of fiscal year 2026.
Automated analysis for informational purposes only — not investment advice.
Last 12 months to 2026-06-13
Gross margin at the 54.2% level
News on 2026-10-02 covered a plan to raise prices on some chips and soft drinks by the end of 2026 or early 2027 to address rising commodity and fuel costs. This plan follows price reductions in February 2026 in response to consumer objections. The gross margin was 54.2% in quarter 2 of fiscal year 2026, whose results were filed on 2026-07-09, compared with 54.7% in quarter 2 of fiscal year 2025, whose results were filed on 2025-07-17. The impact depends on PepsiCo's ability to protect margins without weakening sales volumes, particularly in convenience store and gas station channels, where management described demand as weak.
Operating cash flow reached 13.5 billion dollars, equivalent to 129% of net income of 10.5 billion dollars, in the last 12 months through 2026-06-13. Free cash flow reached 9.3 billion dollars, supporting the company's ability to fund its operations and return capital. However, total debt reached 48.7 billion dollars compared with cash and investments of 10.7 billion dollars in quarter 2 of fiscal year 2026, whose results were filed on 2026-07-09. Therefore, cash generation eases financial pressure, but does not eliminate the effect of debt on flexibility in funding the portfolio transformation, including the expansion of Siete and poppi.
The median analyst price target is 139 dollars and the industry-multiple valuation is 135 dollars, while the discounted cash flow estimate is 125 dollars and the no-growth value is 67 dollars. The targets reflect expected growth, and the industry multiple uses next year's earnings to value the company like its competitors, while the discounted model focuses on cash generated at a discount rate of 8.9%. The no-growth value assumes after-tax operating profit remains constant forever, which is why it differs from methods that incorporate continued growth. Analyst consensus remains Neutral with an average target of 145.25 dollars, after UBS lowered its target to 145 dollars on 2026-10-02.