Company Reports

PepsiCo's tight retail relationships on the back of strong beverage and snack brands, coupled with massive distribution and procurement scale, underpin our wide moat rating, and we foresee this position as unwavering. For one, we see Pepsi’s snack lineup as well placed to bolster its share by leveraging unrivalled brand awareness, operational scale, and retail relations. Within its beverage mix, the firm is exploring a variety of options from nascent, in-house brands to brand licensing from third-party category leaders to expand its sales exposure in nonsparkling categories. This can add to the firm's distribution clout and augment its carbonated drinks that have struggled thus far to narrow the gap with wide-moat Coca-Cola.

PepsiCo's organic revenue rose 2% in the second quarter, comprising mid- to high-single-digit expansion internationally, 1% growth in North American beverages, and a 2% decline in North American foods. Core operating margin fell 40 basis points to 16.8%.

PepsiCo's organic revenue rose 3% in the first quarter of 2026, comprised of mid- to high-single-digit expansion internationally and low-single-digit growth in the North American beverages and foods segments. Adjusted operating margin widened 10 basis points to 15.7%.

PepsiCo's tight retail relationships on the back of strong beverage and snack brands, coupled with massive distribution and procurement scale, underpin our wide moat rating, and we foresee this position as unwavering. For one, we see Pepsi’s snack lineup as well placed to bolster its share by leveraging unrivalled brand awareness, operational scale, and retail relations. Within its beverage mix, the firm is exploring a variety of options from nascent, in-house brands to brand licensing from third-party category leaders to expand its sales exposure in nonsparkling categories. This can add to the firm's distribution clout and augment its carbonated drinks that have struggled thus far to narrow the gap with wide-moat Coca-Cola.

PepsiCo's tight retail relationships on the back of strong beverage and snack brands, coupled with massive distribution and procurement scale, underpin our wide moat rating, and we don’t foresee this position as wavering. For one, we see Pepsi’s snack lineup as well placed to bolster its share by leveraging unrivalled brand awareness, operational scale, and retail relations. Within its beverage mix, the firm is exploring a variety of options from nascent, in-house brands to brand licensing from third-party category leaders to expand its sales exposure in nonsparkling categories. This can add to the firm's distribution clout and augment its carbonated drinks that have struggled thus far to narrow the gap with wide-moat Coca-Cola.

PepsiCo's organic revenue rose 2% in the fourth quarter of 2025, as a mid-single-digit expansion in international sales and 2% growth in beverages in North America more than offset a 1% drop in food sales for the region. Adjusted operating margins widened 140 basis points to 13.9%.

On Dec. 8, PepsiCo released plans to fix its North America food segment by expanding affordable offerings, accelerating health-focused innovation, and cutting costs. Management expects this to help the firm increase sales by 4%-6% and adjusted EPS by 5%-7% in 2026.

PepsiCo's tight retail relationships on the back of strong beverage and snack brands, coupled with massive distribution scale and bargaining edge, underpin our wide moat rating, and we don’t foresee this position as wavering. For one, we see Pepsi’s snack lineup as well placed to bolster its share by leveraging unrivalled brand awareness, operational scale, and retail relations. Within its beverage mix, the firm is exploring a variety of options from nascent, in-house brands to brand licensing from third-party category leaders to expand its sales exposure in nonsparkling categories. This can add to the firm's distribution clout and augment its carbonated drinks that have struggled thus far to narrow the gap with wide-moat Coca-Cola.

PepsiCo's organic revenue rose 1% in the third quarter of 2025 as a price increase of 4% more than offset a 3% volume drop (mostly in North America). Adjusted operating profit fell 8%, however, as its operating margin narrowed 170 basis points to 14.9%.

On Sept. 2, active investor Elliott Investment Management disclosed a $4 billion stake in PepsiCo and proposed a series of measures to the firm's management and board to boost PepsiCo's financial performance and share price. PepsiCo stock rose 2% on the news.

PepsiCo on Aug. 29 agreed to sell Rockstar Energy in the US and Canada to Celsius, in return for $585 million in preferred convertible shares from Celsius that raised its stake in the latter to 11.0% from 8.5%. It will also add Celsius' Alani Nu brand to its distribution in North America.

Following years of anemic growth due to operational missteps and underinvestments, management has worked to right PepsiCo’s ship, driving steady top-line and profit expansion in past years. But we think there is more room to go, as the firm benefits from secular tailwinds in the snack business, accelerating expansion in international ing markets (including Latin America, Asia and Africa), and more business integration that facilitates effective commercialization and efficiency gains.

PepsiCo's organic revenue rose 2% in the second quarter of 2025 as price increases of 4% more than offset a 2% decline in volume. Adjusted operating profits fell 10%, however, as margin narrowed 190 basis points to 16.1%.

Following years of anemic growth due to operational missteps and underinvestments, management has worked to right PepsiCo’s ship, driving steady top-line and profit expansion in past years. But we think there is more room to go, as the firm benefits from secular tailwinds in the snack business, accelerating expansion in various emerging markets (such as Latin America and Asia-Pacific), and an integrated business model facilitating more effective commercialization.

PepsiCo posted 1% organic sales growth in the first quarter of 2025 as a 5% lift in international revenue more than offset a 2% decline in US food sales. Core constant currency operating profit fell 1%.

On March 17, wide-moat PepsiCo announced the $1.65 billion purchase of Texas-based Poppi, a soda brand known for naturally derived dietary fibers that are billed as improving gut health. Founded in 2015, Poppi's sparkling drinks are now widely distributed in the US via wide-moats Walmart, Amazon and Costco as well as no-moat Target. The Poppi purchase is the largest beverage acquisition for PepsiCo following the 2020 purchase of Rockstar for $3.85 billion, signaling the beverage maker's commitment to expanding healthier beverage options to meet rising consumer health awareness.

Following years of anemic growth due to operational missteps and underinvestments, management has worked to right PepsiCo’s ship, driving steady top-line and profit expansion in past years. But we think there is more room to go, as the firm benefits from secular tailwinds in the snack business, growth initiatives in select attractive beverage subcategories (such as energy drinks) and various emerging markets (such as Latin America, Africa, and Asia-Pacific), and an integrated business model facilitating more effective commercialization.

Wide-moat PepsiCo posted 2024 results that met our expectations, but it issued a disappointing 2025 outlook calling for low-single-digit increases in both organic sales and adjusted EPS, below our 5% growth forecasts for both. We think the weak guidance was likely driven by continued sluggish demand in savory snacks and beverages in the US amid consumer belt-tightening and plan to lower our 2025 estimates, but we see no need to change our 10-year forecasts for 4% annual sales growth and a 16% average operating margin. Our $174 per share fair value estimate will likely fall by a low-single-digit percentage, but the stock remains attractive.

Following years of anemic growth due to operational missteps and underinvestments, management has worked to right PepsiCo’s ship, even amid pandemic-related disruptions and input cost inflation. But we think there is more room to go, as the firm benefits from secular tailwinds in the snack business, growth initiatives in select attractive beverage subcategories (such as energy drinks) and various emerging markets (such as Latin America, Africa, and Asia-Pacific), and an integrated business model facilitating more effective commercialization.

We plan to trim our $176 fair value estimate for wide-moat PepsiCo by a low-single-digit percentage after digesting its sluggish third-quarter results. The impact of US consumers tightening their belts and raging geopolitical tensions in the Middle East was evident on the top line with organic sales growth slowing to 1% on a low-single-digit volume decline. But the firm eked out a 5% increase in constant-currency core EPS on tight cost controls.