As of May 22, 2025, PepsiCo Inc has a Discounted Cash Flow (DCF) derived fair value of $193.61 per share. With the current market price at $130.15, this represents a potential upside of 48.8%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $161.12 |
| DCF Fair Value (10-year) | $193.61 |
| Potential Upside (5-year) | 23.8% |
| Potential Upside (10-year) | 48.8% |
| Discount Rate (WACC) | 5.5% - 7.0% |
Revenue is projected to grow from $91854 million in 12-2024 to $151877 million by 12-2034, representing a compound annual growth rate of approximately 5.2%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 91854 | 0% |
| 12-2025 | 90188 | -2% |
| 12-2026 | 95962 | 6% |
| 12-2027 | 103726 | 8% |
| 12-2028 | 111899 | 8% |
| 12-2029 | 120586 | 8% |
| 12-2030 | 126886 | 5% |
| 12-2031 | 134666 | 6% |
| 12-2032 | 139709 | 4% |
| 12-2033 | 142503 | 2% |
| 12-2034 | 151877 | 7% |
Net profit margin is expected to improve from 10% in 12-2024 to 10% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 9626 | 10% |
| 12-2025 | 9405 | 10% |
| 12-2026 | 10008 | 10% |
| 12-2027 | 10817 | 10% |
| 12-2028 | 11670 | 10% |
| 12-2029 | 12576 | 10% |
| 12-2030 | 13233 | 10% |
| 12-2031 | 14044 | 10% |
| 12-2032 | 14570 | 10% |
| 12-2033 | 14861 | 10% |
| 12-2034 | 15839 | 10% |
with a 5-year average of $4982 million. Projected CapEx is expected to maintain at approximately 6% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 5205 |
| 12-2026 | 5420 |
| 12-2027 | 5610 |
| 12-2028 | 5836 |
| 12-2029 | 6204 |
| 12-2030 | 6640 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 33 |
| Days Inventory | 47 |
| Days Payables | 99 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 13378 | 1743 | 4017 | 49 | 7569 |
| 2026 | 18861 | 2473 | 5699 | 39 | 10651 |
| 2027 | 20139 | 2673 | 6160 | 252 | 11055 |
| 2028 | 21509 | 2883 | 6645 | 235 | 11746 |
| 2029 | 23095 | 3107 | 7161 | 207 | 12619 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 161.12 | 23.8% |
| 10-Year DCF (Growth) | 193.61 | 48.8% |
| 5-Year DCF (EBITDA) | 158.15 | 21.5% |
| 10-Year DCF (EBITDA) | 187.99 | 44.4% |
Is PepsiCo Inc (PEP) a buy or a sell? PepsiCo Inc is definitely a buy. Based on our DCF analysis, PepsiCo Inc (PEP) appears to be significantly undervalued with upside potential of 48.8%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $130.15.