Fundamental analysis
PepsiCo, Inc is an American international carbonated beverage and food manufacturer headquartered in Harrison, New York. The main item that gave the brand its name is Pepsi Cola.
Pepsi is a carbonated cola beverage produced by PepsiCo. It is the second most preferred soft drink brand in the world after Coca-Cola.
Pepsi was first mixed in 1893 under the name «Brad’s Drink» in a pharmacy in New Bern, North Carolina, USA. In 1898 it was renamed Pepsi-Cola and in 1961 the name was shortened to Pepsi.
Today, the company sells more than 23 brands. The main brands are Pepsi and Lays.
The company employs 318,000 people (134,000 of them in the US) and sells its products in 200 countries.
The company’s revenues today are spread out:
– 41% beverages
– 59% food
Geographically they are spread out:
– 57% U.S.
– 43% Rest of World
Total sales were $91.4 billion (up 9.5% YoY) with operating profit of $13.8 billion.
PepsiCo managed to save USD 1 billion across the supply chain.
USD 6.6 billion was paid in dividends and USD 1 billion in shares were repurchased.
The company tries to write of itself as socially responsible. It is investing massively in beverages with artificial sweeteners (now available in 127 markets) or recycled and recyclable materials for packaging and shipping.
Results
The company expects a return of capital to investors of $8.2 billion for 2024. Of this, Bud 1 billion in share buybacks and 7.2 billion in dividends.
It also expects revenue growth of about 4% from 2023.
Technical analysis
The stock has seen a crossover of moving averages into a downtrend. However, this is the third time the averages have crossed and their position has not changed much. The stock price has been oscillating around $170 per share for the past few months.
On the downside, support at $155 per share protects the stock.
The RSI is in the neutral zone.
Volume is above average, with more than 3,000,000 shares traded per day on average.
The PE is at 21.98.
Conclusion
Pepsi is one of the blue chip stocks. It is a stable, profitable company that offers a regular dividend. On the other hand, the share price is not rocketing and above all, it maintains value for its investors.
The stock is oscillating in price, but the moving averages are currently giving a downward signal by crossing. Thus, there could be downside, especially if the support at $155 per share does not hold. Conversely, share buybacks and gradual expected earnings growth argue for upside.