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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Pepsico, Inc. (XNAS:PEP) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
PEP
Name:
PEPSICO, INC. (XNAS:PEP)
Sector:
- 696000.00K
Industry:
Beverages�Non-Alcoholic
CEO:
Mr. Ramon Laguarta
Total Employees:
309,000
Our Technological Advancement Rating
Our Rating:
A+
Technological advancement compared to industry is 2655.54% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF PEPSICO, INC.(PEP) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND BEVERAGES�NON-ALCOHOLIC INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
170.66
One Month Price Target:
$171.2
Six Month Price Target :
$173.9
Likely Price in One Year's Time:
Ticker:
$177.14
Likely Trading Range Today Under (Normal Volatility)
$170.27
Price Upper limit ($) :
$171.21
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$165.04
This week:
$158.09
This month :
$145.52
Other Primary facts
Market Cap:
233.94B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
1.38B
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
12.94%
-11.43%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$196.74
$184.71
$144.58
$156.61
Medium risk (<10%) entry points
Buy Call
Sell Call
$180.79
Buy Put:
Sell Put:
$178.23
$160.49
$163.09
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
PEP
Sharpe Ratio:
2.23%
Comparison:
PEP, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is -44.67% lower than the industry
& is -2.09% lower than the market/S&P 500 average
Average Returns/Yield of
PEP
Daily returns:
0.05%
Weekly returns:
0.23%
Monthly returns:
0.90%
Yearly returns:
36.41%
Comparison of returns:
Average annual returns/yield (last 3 years) is -70.25% below industry average
Classification:
PEP, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.16
Statistical test of Returns:
PEP has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
1.63%
Weekly Volatility:
3.64%
Monthly Volatility:
7.27%
Yearly Volatility:
25.19%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.69%
Volatility in last five trading days has been -57.77% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-3.29%
Weekly VaR:
-7.37%
Monthly VaR:
-14.73%
How Much Can the price of
PEP
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-13%
Worst case (decline):
-51.03%
This translates to price declining to:
$149.31
This translates to price declining to:
$83.57
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
PEP is a 3.97% riskier investment compared to the market/S&P 500 & is -10.93% less risky than Nasdaq(IXIC)
Risk (measured by volatility) is -38.11% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
PEP
Beta in relation to market/S&P 500--0.57
Expected beta in 1 year's time:
0.538
Expected beta in 3 year's time:
0.761
Unlevered (debt free) Beta:
0.225
Beta in relation to Nasdaq (XNAS):
0.564
Beta in relation to all global stocks::
0.666
Beta Comparison & Analysis
Beta of competitors/peers::
0.739
Beta is -23.47% lower than peers
Average Industry Beta:
0.913
Beta is -38.07% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
11.81%
Sustainable growth rate is -26.98% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.038
Alpha is -85.90% below industry average alpha yield
Alpha is 242% higher than market/& is unsustainably high
Analysis of Cost of Capital of
PEP
Equity cost of capital:
0.070
Equity cost of capital is -25.31% below industry mean WACC
Unlevered (without debt) cost of capital:
2.79%
Before-tax cost of debt:
4.61%
After-tax cost of debt:
3.64%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.64%
WACC is -31.95% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$58.59
Revenue growth rate per share of (3Y):
12.86
Annual revenue growth rate is -62.73% below industry average
EPS:
$7.31
Expected Annual growth rate of EPS (3Y):
2.24%
Expected future EPS growth rate is -88.64% lower than the Beverages�Non-Alcoholic industry
Free cash flow (FCF) per share:
$5.32
Balance sheet equity growth per share: 20.77%
Equity growth rate per share is -73.30% lower than the industry
Debt per share
$25.06
EBITDA per share
$12.97
Valuation Analysis Today of
PEP
P/E Ratio:
25.18
P/E Ratio of Competitors/Peers:
23.45
P/E ratio is 7.36% higher than main peers & is -79.39% lower than the industry
Stock price/value with industry average P/E ratio: $892.92
PEP is -80.89% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $108.89
Present value of the expected future dividends only: $87.39
P/S (Price to Sales ratio):
2.91
Price to sales ratio is -54.20% below the industry mean
P/B (Price to book value ratio):
12.86
Price to free cash flow: 32.05
Price to free cash flow ratio is -77.96% lower than the industry
Net income growth rate (3Y):
-37.68%
Net income growth rate is -71.29% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 14.81%
Dividend yeild: 2.56%
Previous Dividend: $1.15
Previous adjusted dividend: $1.15
Previous Dividend: $4.38
Expected next dividend best case: $1.20
Expected next dividend worst case: $1.10
Average dividend payment (long-term): $1.04
Average dividend increase/decrease (growth rate) % per period: 1.92%
Expected next dividend payment date: 28/09/2022
Expected next dividend record date: 09/01/2022
-
Previous dividend payment date: 30/06/2022
Previous dividend record date: 06/03/2022
-
Dividend History:
2022-06-02--$1.15
2021-12-02--$1.08
2021-06-03--$1.08
2022-03-03--$1.08
2021-09-02--$1.08
2021-03-04--$1.02
Dividend growth rate is 61.72% higher than the average industry
In-depth Debt & Leverage Analysis
Debt to equity ratio:
190.03%
Net debt to equity ratio:
183.98%
Debt to assets ratio:
37.21%
Net debt to assets ratio:
36.02%
Debt-to-asset ratio is -28.97% below industry average
Ability to repay debt:
Interest coverage ratio:
9.7
Interest coverage ratio is -239.02% less than industry average
Looking forward:
Debt growth rate:
-8.59%
Annual debt growth is 359% higher than industry average debt growth rate
Debt repayment rate in last quarter: 3.49%
Analysis of Key Statistics
Correlation of price movement with the market:
0.738
Statistical significance of correlation:
PEP has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.541
Stock price is 36.52% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.541
Correlation of price movement with Nasdaq (^IXIC):
0.038
Covariance of price movement with the market:
0.036
Kurtosis
19.392
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-0.168
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
PEP
Gross Profit Margin Ratio:
213%
Operating Profit Margin Ratio:
17.46%
Operating profit margin is 20.93% higher than the industry
Net Profit Margin Ratio:
213%
Effective Tax Rate:
20.14%
Effective tax rate is 3.05% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
55.85%
Return on equity (ROE) is 79.24% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
10.93%
Return on assets (ROA) is -3.36% lower than the industry
Financial Leverage:
1.6x
Current Ratio:
0.87
Current ratio is -57.94% below industry average
Cash Conversion Cycle (days):
50.4
Cash conversion cycle is -44.23% below industry average
The remaining useful life of property plant & equipment is: 7.3 years
Stock based compensation to net income ratio:
0.80%
In-depth Efficiency Analysis
Revenue generated per employee:
261.7K
Each employee generates -70% less revenue than industry average revenue per employee
EBITDA generated per employee:
57.9K
Each employee generates -66% less EBITDA than industry average revenue per employee
Profit generated per employee:
32.9K
Each employee generates -72% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 2.3K
Each employee generates -110% less free cash flow than industry average revenue per employee
Assets/Capital per employee
228.5K
Each employee generates -110% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
PEP
COSTCO WHOLESALE CORPORATION (XNAS:COST)
Mondelez International, Inc. (XNAS:MDLZ)
MONSTER BEVERAGE CORPORATION (XNAS:MNST)
DOLLAR TREE, INC. (XNAS:DLTR)
CHS Inc. (XNAS:CHSCM)
NEWELL BRANDS INC. (XNAS:NWL)
CASEY'S GENERAL STORES, INC. (XNAS:CASY)
Innovator Lddrd Alloc PB (BATS:BUFF)
PILGRIM'S PRIDE CORPORATION (XNAS:PPC)
Current Analyst Ratings
Strong buy�8%
Buy�42%
Hold�42%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/19/22
Revenue:
80.85B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
37.84B
43.02B
-
-
32.22B
-
-
32.22B
-
1.85B
3.31B
17.90B
14.12B
10.17B
12.81B
2.58B
10.17B
Statement of Cash Flow
Date:
Period:
658.00M
Differed Income Tax :
257.00M
Stock Based Compensation :
81.00M
Change in Working Capital :
- 2325000.00K
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
- 3118000.00K
Net Cash Provided by Operating Activities:
- 174000.00K
Investments in PP&E:
-
Net Acquisitions:
3.45B
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/19/22
2022
Q1
6.56B
343.00M
6.90B
9.42B
4.76B
1.25B
22.34B
22.02B
18.11B
18.10B
3.60B
4.30B
4.50B
70.62B
-
92.96B
20.37B
5.46B
-
-
-
25.82B
34.59B
9.16B
48.82B
-
74.64B
23.00M
67.93B
- 15343000.0K
-
March 19, 2022 at 6:00:00 AM
70.06B
18.20B
92.84B
3.94B
40.05B
33.5B
22.00M
- 515000.00K
2.96B
- 1251000.00K
-
- 193000.00K
- 1505000.00K
1.17B
- 1780000.00K
- 17000.00K
984.00M
6.69B
5.71B
- 174000.00K
- 522000.00K
- 696000.00K
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
PEP
2023
2024
2025
2026
2027
$201.57
$209.23
$217.18
$225.43
$233.99