Key statistics

Is PEP a good stock to buy in 2026?

PepsiCo (PEP) currently trades at a P/E of 24.25x, a notable discount to the sector average of 29.3x, and its DCF valuation of $232.23 suggests a significant 49.7% undervaluation. While 35.5% of analysts rate PEP as a Buy, indicating a reasonable level of confidence, the overall consensus remains ‘Hold’. This analysis is for informational purposes and should not be considered investment advice.

2026 PEP price scenarios

Based on analyst consensus of $174 from 45 analysts. Not a prediction by Alert Invest.

About PepsiCo, Inc. (PEP)

PepsiCo, Inc. manufactures, markets, distributes, and sells various beverages and convenient foods worldwide. The company operates through seven segments: Frito-Lay North America; Quaker Foods North America; PepsiCo Beverages North America; Latin America; Europe; Africa, Middle East and South Asia; and Asia Pacific, Australia and New Zealand and China Region.

Led by CEO Ramon Luis Laguarta, PepsiCo, Inc. stands as a global powerhouse in the consumer defensive sector, employing approximately 319,000 individuals worldwide. The company’s distinctive strengths lie in its unparalleled global distribution network, vast portfolio of iconic brands across both beverages and convenient foods, and its consistent ability to adapt to evolving consumer preferences through innovation and strategic market penetration.

PEP competitive moat and business analysis

PepsiCo’s competitive advantage, or economic moat, is primarily built upon its formidable brand equity and expansive global distribution network. While the reported net margin stands at 9.16%, which is respectable for a mature consumer defensive giant, the true strength lies in the recognition and loyalty associated with brands like Pepsi, Lay’s, Gatorade, and Quaker. The unavailable ROE and ROIC data makes a precise assessment challenging, but the company’s consistent revenue generation points to efficient asset utilization and strong market positioning.

Given the data provided, a detailed segment and geographical revenue breakdown for the fiscal year 2025 is not available. However, PepsiCo operates through a diversified model spanning Frito-Lay North America, Quaker Foods North America, PepsiCo Beverages North America, and significant international operations across Latin America, Europe, Africa, Middle East & South Asia, and Asia Pacific. This broad operational footprint mitigates regional risks and leverages global market trends effectively, supporting the resilience of PEP stock.

The company’s moat appears stable, supported by a 2.3% year-over-year revenue growth. This steady, albeit modest, growth reflects the mature nature of the consumer defensive sector but also PepsiCo’s ability to extract value from existing markets and selectively expand. As mentioned by Senior Vice President of Investor Relations, Ravi Pamnani, during the 2025 Fourth Quarter Earnings Call, “We may make forward-looking statements on today’s call, including about our business plans, guidance and outlook,” suggesting a continuous strategic focus on future performance and market adaptation to reinforce its competitive edge.

When assessing PepsiCo against its peers, it’s crucial to consider its dual focus on beverages and snacks, which sets it apart from many pure-play beverage companies. For instance, comparing PEP vs BTI involves contrasting a diversified food and beverage giant with a tobacco leader, while PEP vs BUD highlights the difference between non-alcoholic and alcoholic beverage markets. A comparison of PEP vs CCEP focuses on bottlers versus brand owners, each with distinct operational models and market dynamics.

PepsiCo, Inc. analyst rating

Based on 45 analysts. 35.5% rate PEP Buy or Strong Buy.

The 35.5% analyst ‘Buy’ rating for PEP stock, while not a majority, is quite robust within the often-conservative Consumer Defensive sector. Companies in this mature industry rarely garner overwhelmingly strong buy recommendations, making this level of positive sentiment noteworthy for a stock primarily valued for stability and dividends.

Is PEP undervalued or overvalued?

Analyzing PEP valuation, we observe that the stock trades at a P/E ratio of 24.25x, which is a favorable 5.1x discount compared to the Beverages – Non-Alcoholic sector average of 29.3x. This suggests that PEP stock may offer relative value within its industry.

Furthermore, the discounted cash flow (DCF) model estimates a fair value for PEP at $232.23, indicating a substantial 49.7% upside potential from the current price. While the P/S ratio of 2.22x also points to an attractive valuation, the P/B ratio of 9.92x suggests the stock is priced at a premium relative to its book value. Investors considering if PEP is a good stock should weigh these various metrics for a comprehensive view.

PEP financial health & key metrics

For value investors, PEP stock presents a mixed but intriguing picture. While its P/E ratio sits at a discount to the sector average and its DCF fair value points to significant undervaluation, the high debt-to-equity ratio of 2.47x warrants careful consideration. The 4.17% FCF yield suggests healthy cash generation to support its operations and dividend, yet the modest 2.3% revenue growth indicates the mature nature of the business. Investors should balance the attractive valuation metrics with the leverage profile and growth trajectory when evaluating if PEP is a good stock for their portfolio.

PepsiCo, Inc. earnings history & next report

PepsiCo, Inc. reported EPS of $1.61, beating estimates by 4.55%. Next earnings: 2026-07-16 with EPS estimate of $2.2.

For the upcoming earnings report on 2026-07-16, investors will be keenly watching whether PepsiCo can once again beat its EPS estimate of $2.2, following its previous beat by 4.55%. Key areas of focus will include organic revenue growth across its diverse segments, margin performance in the face of inflation, and any updates to full-year guidance, all of which will impact the outlook for PEP stock and its potential valuation.

PEP daily short volume

Short volume data from FINRA CNMS Consolidated — shares sold short in the most recent US trading session. A high short ratio can signal bearish conviction or a potential short squeeze. Updated every trading day.

PEP insider trading activity

Corporate insiders must report trades to the SEC within two business days.

Source: SEC Form 4 via EDGAR · Data: Financial Modeling Prep · Not investment advice

Recent PEP analyst rating changes

PepsiCo, Inc. stock news today

How does PEP compare to its peers?

PepsiCo, Inc. (PEP) operates in a dynamic sector, facing various competitors across its beverage and snack businesses. Understanding how PEP stock stacks up against its industry peers provides crucial insights into its market position, operational efficiency, and investment attractiveness. Here’s a brief look at some key comparable companies:

FAQ — PepsiCo, Inc. (PEP) stock