(fa30cfe8fd7f41cda4c97de6732f25ae_25) [15 0 R /XYZ null 752 null] (Image source: Valuentum. /Parent 2 0 R The company expects that both the global beverage and global snack markets will grow by mid-single-digits annually in the medium-term, and the company's international growth runway is immense. (Image source: Valuentum), Image source: Valuentum. Is It Time to Buy Coca-Cola? %PDF-1.4 For PepsiCo, we use a 8.9% weighted average cost of capital to discount future free cash flows. XFGj,>4I7X3I$S>$*Fz?p`& T9(P:I A3Z$|@):ME~B*)lpoCW3=u[*&{2B>+y Q ~XT.QS ]21M*MXx1J`>Y9H?{8M I Valuentum is a publisher of financial information. x\G%:G`pH87=LLwp\wfQU3w6Z~;U#~|OZbiL^_>|~X=?{|G|\8(zz^_{wo&3.{r( Beyond year 5, we assume free cash flow will grow at an annual rate of 3.7% for the next 15 years and 3% in perpetuity. Image source: Valuentum. endobj << endobj /Annots [34 0 R 35 0 R] ZW}tua0gh3l*o*gny3OPh-! /Kids [6 0 R 7 0 R 8 0 R 9 0 R 10 0 R 11 0 R 12 0 R 13 0 R 14 0 R 15 0 R By downloading this Report, you acknowledge that we may share your information with our white paper partners/sponsors who may contact you directly with information on their products and services. The two are similar regarding the beverages they sell worldwide. In addition, the Herbal Beverages study looks at present and projected consumer sales positions based on global market commodities. 24 0 obj Parkev Tatevosian owns Coca-Cola. Value outpaced volumes for PepsiCo's beverage division in North America, Please enter a work/business email address. The company has 20+, billion-dollar brands spanning its namesake to Quaker to Aquafina to Doritos to Brisk and beyond. PepsiCo is truly a powerhouse when it comes to brand awareness, and consumers keep coming back for more. << Invest better with The Motley Fool. PepsiCo aims to generate long-term organic revenue growth of 4%-6% annually, aided by its marketing initiatives. Some of the other securities written about in this article may be included in Valuentum's simulated newsletter portfolios. 4 0 obj /F 2 People can go to see musicians in concert, and restaurants are welcoming guests to dine on premises, both inside and outside. /Pages 2 0 R Analysts have used primary and secondary research methodologies to create a comprehensive analysis. /Author (anonymous) (fa30cfe8fd7f41cda4c97de6732f25ae_16) [11 0 R /XYZ null 750 null] << The Customer Demand Is There. /Parent 2 0 R 6 0 obj After all, if the future were known with certainty, we wouldn't see much volatility in the markets as stocks would trade precisely at their known fair values. >> /Contents 52 0 R endobj Industry Newsletter at USD 100 per month per issue. /Filter /FlateDecode /Prev 63 0 R 26 0 obj Reference was also made to the release in the US last month of nitrogen-infused Nitro Pepsi as well as the commencement of distribution of Hard Mtn Dew in the market in February. If I Could Buy Only 1 Stock, This Would Be It, This Warren Buffett Stock Is Recession-Proof and Generates Passive Income for Investors. /Type /Page endobj Folks are spending more time working, learning, and entertaining at home, and so it is creating more opportunities to have a snack. /MediaBox [0.0 0.0 792.0 612.0] Our model reflects a 5-year projected average operating margin of 18.6%, which is above PepsiCo's trailing 3-year average. Find more research reports on Herbal Beverages Industry. 14 0 obj 8 0 obj PepsiCo's robust snack division has thrived since the pandemic's onset. /Type /Page >> /C [0.0 0.0 0.0] The market has grown as a result of inflation. endobj Goldman Floats Case for Lower VIX Even in Event of Recession, Wily Covid Variant Sweepsthe Country, Dodging Immune Defenses, Snap Plunges After Missing on Revenue as Advertisers Pull Back, Musk Lieutenant Scrutinized inInternal Tesla Purchasing Probe, YouTube to Remove Abortion Falsehoods, Direct Users to Facts, Macrons Government Charts Path for Gradual Deficit Reduction, Sunaks Tax Affairs Back in Spotlight in UK Race to Succeed Johnson, Worlds Frothiest Housing MarketCools in Global Warning Signal, Ex-Coinbase Manager Arrested in US Crypto Insider-Trading Case, Speedy Delivery: Medals At Worlds Given Out Almost Instantly, Philadelphia 76ers Plot New Arena With No Public Money. /MediaBox [0.0 0.0 612.0 792.0] /Resources 37 0 R /MediaBox [0.0 0.0 612.0 792.0] In the chart below, we show the probable path of ROIC in the years ahead based on the estimated volatility of key drivers behind the measure. endobj /Type /Page >> endobj /Contents 48 0 R /Parent 2 0 R Simultaneously, as people are spending more time away from home, returning to offices -- and with students going back to school on campus -- there will be fewer opportunities to eat at home, thereby slowing sales for PepsiCo's lucrative snack segment. Is this happening to you frequently? /Contents 36 0 R Create stability by making appropriate decisions for individual Herbal Beverages business groups, goods, and service lines about capital and expenditure. % /Type /Outlines Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address. /Type /Page It covers: Olly has been with Just Drinks since late-2003 and has been managing editor since 2005. /Parent 3 0 R /Parent 2 0 R A weekly roundup of the latest news and analysis, sent every Monday. 22 0 obj This QuickTake adaptation of our award-winning podcast, The Pay Check, focuses on the racial wealth gap. Regardless, investors continue to like the shareholder-friendly nature of the PepsiCo management team, and we do, too. >> Valuentum is not a money manager, broker, or financial advisor. Very few firms can say they have achieved this feat. Please. << For a brief overview of the global Herbal Beverages market, the research report provides an executive summary. (fa30cfe8fd7f41cda4c97de6732f25ae_4) [8 0 R /XYZ null 756 null] PepsiCo is digitizing its supply chain and investing in automation to boost its operational efficiency and improve its cost structure. We offer subscriptions and exclusive newsletters. As such, we assign PepsiCo a ValueCreation rating of EXCELLENT. >> Analysts believe that the changing consumption patterns are expected to have a great influence on the overall market. /MediaBox [0.0 0.0 612.0 792.0] In 2020, Coke's sales were down by 11.4%. /ModDate (D:20220425185339+00'00') << Client will get one free update on the purchase of a Corporate User License. PepsiCo's 3-year historical return on invested capital (without goodwill) is 25.3%, which is above the estimate of its cost of capital of 8.9%. In contrast, its beverage segment reported revenue of $17.6 billion and operating income of $1.9 billion. >> /Dests 25 0 R Returns as of 07/21/2022. 11 0 obj << endobj We're huge fans of Pepsi's brand portfolio, but competition remains fierce. That has given governments the confidence to reopen economies and keep them open despite several surges of COVID infection. If you have an ad-blocker enabled you may be blocked from proceeding. /Contents 40 0 R /Parent 2 0 R The Motley Fool has a disclosure policy. How we calculate PepsiCo's weighted average cost of capital. 3 0 obj /MediaBox [0.0 0.0 612.0 792.0] There's a lot of room for further growth, and organic revenue expansion has been stellar the past several years, averaging in the 3-7% range. /Resources 29 0 R Follow us on Twitter: @Valuentum. /Resources 53 0 R /Length 2643 These figures are for North America alone. PepsiCo's stock performance more than doubled Coca-Cola's in 2021. I wrote this article myself, and it expresses my own opinions. >> endobj The duration of the value composition of PepsiCo's equity value. Please read our Disclaimer that applies to all articles published on Seeking Alpha: http://www.valuentum.com/categories/20110613. We think PepsiCo has carved out a nice economic moat around its business. 18 0 obj (Image source: Valuentum). /Parent 2 0 R ] (fa30cfe8fd7f41cda4c97de6732f25ae_13) [10 0 R /XYZ null 752 null] The Motley Fool has no position in any of the stocks mentioned. 27 0 obj PepsiCo is a Dividend Aristocrat that has increased its payout over the past ~50 consecutive years. Pepsi's fundamental strength is hard to poke holes in, and the firm's strength in North America is augmented by its exposure to potentially higher-growth emerging markets, though higher volatility in the latter is not uncommon. The company's large net debt load weighs negatively on its Dividend Cushion ratio (0.8), though Pepsi's ability to generate sizable free cash flows in almost any operating environment continues to impress. /MediaBox [0.0 0.0 612.0 792.0] /Count 14 << >> << /Contents 54 0 R PepsiCo is truly a powerhouse when it comes to brand awareness, and consumers keep coming back for more. (fa30cfe8fd7f41cda4c97de6732f25ae_22) [14 0 R /XYZ null 750 null] << << (Image source: Valuentum.) Learn More. /Count 17 /Count 0 >> endstream endobj xWKo@- Tep*RMg:Uu;fv|y9C~3&DGhp-F5{zF|ec2+^g FV}p25(72a7vb[}kmeT+@T# s`QYek{ED~:v;~9t=)xC7!`#=u.7wHH~J% %a*(&t[Ctq{q S@6TRbQNH/4NRfF3x'W1=8Dt=7rM7v$w1UV C}rjp'=WR,{;P3* QtL PepsiCo's first-quarter 2022 results, released April 26, showed that organic performance was solid. endobj endobj /Parent 2 0 R Please disable your ad-blocker and refresh. We think this may happen to many food and beverage stocks in the coming quarters, which is why we remain cautious on the consumer staples (VDC) sector. Visit our website at www.valuentum.com for more information. The key investment considerations we consider with respect to PepsiCo. /Font 64 0 R x[Yok!9b'a;IsD[$wyO1 8~O_5]]3=]F,wcz|p$ How we calculate PepsiCo's weighted average cost of capital. The top stories of the day delivered to you every weekday. There's also white label competition, and off brands that are looking to capture share as stretched consumers may balk at price increases. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Its free cash flow generating abilities are impressive, though its net debt load is rather large. /Contents 58 0 R Dominican Republic In-depth PEST Insights, Five-year forecasts and the impact of COVID-19, The performance of the online channel versus offline, Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation. Motley Fool Issues Rare All In Buy Alert, Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. endobj How we derive the fair value estimate range for PepsiCo. endobj Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. Thanks for reading this research article; you can also get an individual chapter-wise section or region wise report versions like LATAM, North America, MENA, Southeast Asia, Europe, APAC, United States or China, etc. Delivery trucks parked outside the Pepsi Beverages Co. plant in Louisville, Kentucky. A summary of the key assumptions behind our DCF-derived fair value estimate. 7 0 obj The best measure of a company's ability to create value for shareholders is expressed by comparing its return on invested capital with its weighted average cost of capital. endobj << endobj Though shares may struggle through 2022, its ~2.9% dividend yield is hard to pass up. 25 0 obj /Contents 28 0 R /Parent 2 0 R Assumptions, opinions, and estimates are based on our judgment as of the date of the article and are subject to change without notice. endobj Although this return to routine has been progressing throughout 2021, away-from-home sales of beverages are still below pre-pandemic levels, according to Coca-Cola CEO James Quincey. /Resources 39 0 R I have no business relationship with any company whose stock is mentioned in this article. << << Adapt their financial planning after Herbal Beverages market stability sets in to press forward. (Image Source: PepsiCo (CAGNY, 2022)). This article or report and any links within are for information purposes only and should not be considered a solicitation to buy or sell any security. Enter your details here to receive your free Report. /Names [(fa30cfe8fd7f41cda4c97de6732f25ae) [6 0 R /XYZ null 771 null] ^&=eFJ1?b%)$I>L_V!/qCWf^_R,iFq#0c@~V$B2B`R#+?%pU@}P1~/h/*`&buT @ARU$$1)68AKoK@`+@,MeZ{3hTi_FTj endobj /Length 1195 /Type /Page Three hosts, One topic, three takes. Herbal Beverages Market 2022 Analysis by Top Leading Players | Coca-Cola, PepsiCo, Nestle, Unilever Group, Vitamin B12 (Cobalamin, Cyanocobalamin) Consumption Market Size | Share | 2022-2028, PP Automotive Airbag Fabric Market is Booming Worldwide with Hyosung, Toyobo, Toray, Global Bioprocess Validation Market Growth, Trend and Forecast 2019-2025 Market to Witness Robust Expansion by 2029 | Merck KGaA, SGS S.A, Eurofins Scientific, Waste Recycling Services Market 2022 Key Performance, Top Players, Segmentation, and Opportunities Analysis by 2030, Europe: Russia, Ukraine, France, Spain, Sweden, Norway, Germany, Finland, Poland, Italy, United Kingdom, Greece, Austria, Denmark, Switzerland, Netherlands, Belgium, Turkey, Luxembourg, Asia-Pacific: China, Japan, India, Australia, South Korea, Taiwan, Malaysia, Philippines, Thailand, Singapore, South America: Brazil, Argentina, Peru, Chile, Middle East and Africa: Bahrain, Egypt, Israel, Kuwait, Qatar, Saudi Arabia, United Arab Emirates, South Africa. Cumulative Growth of a $10,000 Investment in Stock Advisor, Why GameStop Is Falling on the Day It Splits Its Stock, 2 Nasdaq 100 Stocks to Buy Hand Over Fist and 1 to Avoid Like the Plague, Why Cruise Line Stocks Just Got Destroyed, The CHIPS Act Could Boost These 3 Semiconductor Stocks, Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research, Copyright, Trademark and Patent Information. PepsiCo is a global food/beverage company with a plethora of respected brands. :y%y&q,q!vC3?WrQ. In 2021, PepsiCo's stock returned 17%, handily outperforming Coca-Cola's return of 8%. /MediaBox [0.0 0.0 612.0 792.0] >> 17 0 obj We think the firm is attractive below $118 per share (the green line), but quite expensive above $178 per share (the red line). tmS}3<2 bGs=5C)1)8r7zhAFW~](Y|GKYW/e^BcOs*&rOqR];{OQV-Cnx%Z%T[\\uT#1^z}Fvlh!~;]`l+2fc#T+[3%b;}7A[mWM>E(HSs:X-{Q7{=qrqWV {1Rs[u*+|D0alBljlI8-nA>Cdhwav@C r lc ~Mf' a8": ?N[a=Tf=(a8{a!y@x@NKmk%Vz/!7H$L7@{N]&/weRZ@sAu qZ&/C!8s$,LZ`JuKv:+dRI44T3%}d)-QNJWDfZvvDm The company has spent decades securing exclusive relationships with venue operators worldwide, including movie theaters, ballparks, theme parks, and restaurants, along with college campuses. I am not receiving compensation for it (other than from Seeking Alpha). /Contents 46 0 R 9 0 obj >> endobj By Market Intelligence Data. Valuentum owns SPY, SCHG, QQQ, VOO, and DIA. endobj stream /XObject << /Filter /FlateDecode We expect PepsiCo to continue to generate value for shareholders. /Title (Introduction Summary ) (Image source: Valuentum). And remember that beverages cost much more when you buy them for consumption outside of your home. 21 0 obj >> /Contents 38 0 R (fa30cfe8fd7f41cda4c97de6732f25ae_10) [9 0 R /XYZ null 749 null] The Supply Still Isn't. /ExtGState 66 0 R /Parent 2 0 R /Resources 51 0 R For 2022, management expects to return $7.7 billion in cash to shareholders comprised of $6.2 billion in dividends and the balance in share repurchases. We think the market may still be bidding up shares of PepsiCo a bit too much though, as our fair value estimate stands at $148 per share (shares of PepsiCo are trading at $162 each at the time of this writing). The company has grown its payout at an 8% compound annual growth rate since 2010, while repurchasing shares along the way. (fa30cfe8fd7f41cda4c97de6732f25ae_40) [19 0 R /XYZ null 572 null] !TDJ B ];7_q]o6 F:#t][a _M-h^2"K@jxs`n"X ~6ptp#%sx74Y6o8b>w8 v3h,eBsp^:I":"$T`x :g"qe L1Vo>Nh[_ Q cV\TiZ\DU?N&Nxir"9*#y+;RkF4SFG=#QBT}fOPgR`EYhFT3JcZ%A( BQ)$KPf"3Jf1WECnU%/lt~.X68ajx;Q. We think PepsiCo is worth $148 per share with a fair value range of $118- $178 per share. /Contents 44 0 R (Image source: Valuentum), Image source: Valuentum. Sales Are Surging for Coca-Cola -- Should You Buy Now? In subsequent commentary, the Pepsi, Mountain Dew, Gatorade, Rockstar, Lifewtr and Aquafina brands were all credited with delivering double-digit sales growth in North America. Lululemon Staff Petition to Unionize in Washington, D.C. Women on S&P 500 Bank Boards Post Record Stretch With No Gains, Weatherman Who Warned of Extreme Heat Recounts His Viral Dont Look Up TV Moment, Tesla Now Has an Exclusive Lane at a US-Mexico Border Crossing, Pennsylvania County Could Become First to Divest From Wells Fargo Over Abortion, Boston Train Fire Adds to Troubled Safety Record atTransit Agency, How Amsterdams Mayor Is Trying to Hold Back a Tide of Tourism, Crypto Crash Be Damned, Some Workers Still Choose Digital Pay, Indonesia Plans Wholesale Digital Currency to Improve Transfers. The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sectors subsequent necessity, panic-induced bulk purchasing, and spending more time at home. PepsiCo historically has spent considerable sums buying back its stock which competes for capital against its dividend obligations. Our valuation model reflects a compound annual revenue growth rate of 4.4% during the next five years, a pace that is lower than the firm's 3-year historical compound annual growth rate of 7.1%. Image source: Valuentum. >> The company has 20+, billion-dollar brands spanning its namesake to Quaker to Aquafina to Doritos to Brisk and beyond. To access PepsiCos official first-quarter 2022 results announcement, click here. (fa30cfe8fd7f41cda4c97de6732f25ae_52) [21 0 R /XYZ null 752 null] /Next 62 0 R >> /Contents 32 0 R >> GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. /F 2 >> /CreationDate (D:20220425185339+00'00') /MediaBox [0.0 0.0 612.0 792.0] 3i@,w)1| w1%tHj]K)|;Byw;SAjeQn*^E/F%W!T\N9Z.'Qd@mA@3aS)pn3r:d+I\#LI&dyL=$0!t. << International consumer packaged-goods giants Coca-Cola (KO -0.23%) and PepsiCo (PEP 0.15%) have competed for decades. /MediaBox [0.0 0.0 792.0 612.0] PepsiCo's snack segment has thrived since the pandemic's onset. /MediaBox [0.0 0.0 612.0 792.0] It is hard not to like the reliability of Pepsi's business model, and such stability drives its impressively consistent free cash flow generating ability. /Count 0 (Image source: Valuentum), Image source: Valuentum. (fa30cfe8fd7f41cda4c97de6732f25ae_49) [20 0 R /XYZ null 572 null] /Producer (Wdesk Fidelity Content Translations Version 006.003.016) /MediaBox [0.0 0.0 612.0 792.0] >> The Regions are further sub-divided into: This report on pre-post pandemic Herbal Beverages market strategy can assist consumers with: https://www.marketintelligencedata.com/reports/4411880/global-herbal-beverages-market-insights-and-forecast-to-2028?Mode=hazal_1.
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