Jefferies downgraded PepsiCo Inc (NASDAQ:PEP) stock to "hold" from "buy," and cut its price target to $170 from $171. The analyst in coverage cited limited upside potential amid a soft beverages market.Analysts were divided on PEP coming into today, with 10 calling it a tepid "hold" or worse, while 10 said "strong buy." Should more firms swing to the bearish side, the security could dip even lower.The shares are on track for their third loss in the last four sessions, and have fallen more than 15% in the la ...

Group 1: Company Overview - Coca-Cola focuses exclusively on beverages, leveraging a vast global distribution network and strong marketing skills, making it a leader in the consumer staples sector [2] - PepsiCo, while also a major beverage player, diversifies its offerings with snacks and packaged food products, maintaining a strong distribution network and marketing capabilities [3] - PepsiCo ranks as the No. 1 snack brand and holds a solid No. 2 position in the broader beverage market, showcasing its diversified business model [4] Group 2: Dividend Strength - Both Coca-Cola and PepsiCo are recognized as Dividend Kings, indicating robust underlying business models, with Coca-Cola having a longer dividend streak [5] Group 3: Current Performance - Currently, Coca-Cola is outperforming PepsiCo, which is experiencing some business weakness, particularly after a period of significant price increases due to inflation [6][7] - PepsiCo reported organic sales growth of 2% and core earnings growth of 9% in 2024, with expectations for similar performance in 2025 [7] Group 4: Stock Valuation - PepsiCo's stock has declined approximately 20% from its peak in 2023, resulting in a historically high yield and price-to-sales and price-to-earnings ratios below five-year averages, suggesting it is undervalued [8] - In contrast, Coca-Cola's stock has rallied, leading to a lower dividend yield and price ratios above their five-year averages, making it appear more expensive [9] Group 5: Investment Recommendation - For long-term investors, particularly those focused on income, PepsiCo presents a more compelling investment opportunity due to its attractive yield of 3.5% following Coca-Cola's recent price rally [10]

In the latest trading session, PepsiCo (PEP) closed at $153.88, marking a -0.2% move from the previous day. The stock's performance was behind the S&P 500's daily gain of 1.12%. On the other hand, the Dow registered a gain of 1.14%, and the technology-centric Nasdaq increased by 1.46%.Prior to today's trading, shares of the food and beverage company had gained 7.46% over the past month. This has outpaced the Consumer Staples sector's gain of 6.52% and the S&P 500's loss of 4.13% in that time.Investors will ...

When the market narrative becomes too widely accepted, excess seems to be created in some areas of the economy as businesses prepare for what’s coming their way. Today’s stock market seems to be focused on one theme and one theme only: stagflation. This rare economic condition, not seen since the 1970s, poses a particular risk for investors, though not one that can’t be hedged or managed. But before investors learn about these strategies and safety stocks, they must first understand stagflation. Simply put, ...

Core Viewpoint - PepsiCo Inc. has experienced a significant recovery in its stock price, rising by 7.1% over the past month, primarily due to strong fourth-quarter 2024 results that exceeded earnings estimates and showed year-over-year improvement [1][2]. Financial Performance - The fourth-quarter 2024 results demonstrated effective cost controls and strategic investments that enhanced market competitiveness, contributing to better bottom-line results [1][9]. - The company's top line also surpassed consensus expectations, with international business showing a 6% year-over-year organic revenue growth and a 260 basis points expansion in core operating profit margin [10]. Market Position - PepsiCo's stock is currently priced at $155.99, reflecting a 10.2% premium to its 52-week low of $141.51 and a 15% discount from its 52-week high of $183.41, indicating potential upside [5]. - The stock trades above its 50-day moving average, suggesting bullish sentiment in the market [6]. Growth Drivers - The company is well-positioned to benefit from strong consumer demand, a diversified portfolio, modernized supply chain, improved digital capabilities, and flexible distribution systems [8]. - PepsiCo's productivity and cost-management efforts are expected to enhance profitability and support brand growth, innovation, and channel expansion [9]. International Expansion - Developing and emerging markets present significant growth opportunities for PepsiCo, with tailored distribution models and locally relevant products being key strategies [11]. - The company anticipates continued progress in expanding its international business and improving its North America segment performance in 2025 [12]. Valuation Metrics - PepsiCo is trading at a forward 12-month P/E ratio of 18.6X, which is below the industry average of 19.22X and the S&P 500's average of 21.95X, indicating a potential buying opportunity [13]. - Despite the lower valuation compared to peers, there are concerns that this may signal underlying issues rather than a straightforward investment opportunity [15]. Analyst Sentiment - The Zacks Consensus Estimate for PepsiCo's EPS for 2025 and 2026 has decreased by 2.5% and 3.1%, respectively, indicating a negative sentiment among analysts [17]. - For 2025, the consensus estimates imply modest growth of 0.1% in sales and 1.7% in EPS year-over-year, with slightly better growth projected for 2026 [18]. Challenges - Despite inherent strengths, PepsiCo faces ongoing headwinds, including subdued demand in its convenient food business and impacts from product recalls, which contributed to a 0.2% year-over-year revenue decline in Q4 2024 [20][21]. - Increased pricing due to inflation has led to reduced volumes as consumers adjust their spending habits, further complicating the company's performance in North America [21][22].

Group 1: Company Overview - PepsiCo is a consumer staples company that produces affordable products, fostering consumer loyalty even during economic downturns [2][3] - The company has a diverse product range, including beverages, snacks under the Frito-Lay brand, and packaged foods through Quaker Oats, making it a dominant player in both beverages and salty snacks [3][4] - PepsiCo operates in over 200 countries, supported by a strong distribution system and marketing capabilities [4] Group 2: Investment Opportunity - Currently, PepsiCo's stock is down nearly 23% from its May 2023 highs, presenting a potential buying opportunity for dividend growth investors [1][7] - The company offers a historically high dividend yield of 3.5%, backed by 52 consecutive annual dividend increases, indicating a strong business model [5][6] - Traditional valuation metrics, such as price-to-sales and price-to-earnings ratios, are below their five-year averages, suggesting that PepsiCo is undervalued [7] Group 3: Current Challenges - PepsiCo is experiencing a slowdown in top-line growth following aggressive price hikes during the pandemic, a trend affecting many peers in the industry [9] - The company faces potential demand impacts from new weight loss drugs and increased health consciousness among consumers, particularly due to its focus on beverages and snacks [11] - Management has indicated that organic sales growth will be low-single-digit and earnings growth mid-single-digit through 2025, leading to expectations of slower recovery [13] Group 4: Future Outlook - Despite current challenges, PepsiCo has a history of overcoming difficult periods and is already taking steps to improve performance, such as acquiring Siete Foods [10][11] - The long-term outlook remains positive, as low-single-digit growth could indicate potential for stronger performance once the company stabilizes [14]

Company Overview - PepsiCo has announced the closure of its Hudson Valley manufacturing facility in Liberty, NY, which produces PopCorners snacks, resulting in nearly 300 job losses [1][6] - The facility has been a significant employer in the region for almost three decades, initially operating under Ideal Snacks since its founding in 1997 [6] Reasons for Closure - The closure is attributed to challenges in sustaining long-term operations amid shifts in the snack industry and slowing growth in the product line [2][3] - PepsiCo acknowledged the plant's contributions but cited broader industry trends as a reason for the decision [4] Impact on Employees and Community - Layoffs will begin on May 21 and occur over a two-week period, with affected employees being non-unionized [3] - Local officials expressed disappointment over the closure, emphasizing the plant's integral role in the community [10] - Economic development groups are collaborating with local governments and PepsiCo to assist displaced workers [11] Economic Context - Despite the setback from the plant closure, Sullivan County reported the strongest private sector job growth in the Hudson Valley last year, along with a slight decline in unemployment [12] - However, challenges remain, as 14.8% of the county's residents lived in poverty in 2023, higher than the national average of 12.5% [13]

Core Viewpoint - PepsiCo is highlighted as a favored consumer staples company due to its strong demand profile driven by the popularity of its affordable and appealing food and beverage products [2] Company Summary - PepsiCo is recognized for producing a wide range of inexpensive and highly palatable foods and beverages, which contributes to its robust demand [2]

Company Overview - PepsiCo is one of the world's largest convenience food and beverage companies, generating over $90 billion in revenue and $15 billion in operating profit [2] Leadership and Experience - The leadership team includes Chairman and CEO Ramon Laguarta and EVP and CFO Jamie Caulfield, who collectively have 60 years of experience at PepsiCo, with a strong operational background [3] Growth Performance - Since Ramon Laguarta took over in 2018, PepsiCo has focused on re-accelerating growth, resulting in a 40% increase in revenues and over 50% growth in earnings per share (EPS) on a currency-neutral basis [3]

Group 1: Core Business Performance - PepsiCo experienced a 2% organic sales growth in 2024, driven by strong performance in international markets, despite a previous year's growth of 9% and challenges such as a significant safety recall [4] - The company anticipates another year of subdued growth, projecting organic sales to rise by at least 2% and profits to expand around 4% [4][10] - Historical performance indicates that PepsiCo has managed to thrive during consumer spending downturns, with core earnings rising by 9% in 2024 despite only a 2% increase in organic sales [10] Group 2: Dividend and Income Generation - PepsiCo offers a dividend yield of 3.6%, significantly higher than the 1.2% yield of the broader S&P 500, and is recognized as a Dividend King for increasing its payout for 53 consecutive years [5][6] - The latest dividend increase was 5%, supported by the company's robust cash flow, which amounted to $13 billion in operating cash flow over the last two years [6] Group 3: Valuation and Market Position - The stock is currently valued at 21 times earnings, close to a five-year low, making it an attractive option compared to competitors like Coca-Cola and McCormick, which are valued at 28 and 27 times earnings, respectively [7][8] - On a price-to-sales basis, PepsiCo's ratio of 2.2 represents a multiyear low, indicating a potentially undervalued position in the market [8]