Pepsico -35% from ATH
The Stock of Snack & Beverage Giant Pepsico is down significantly since its ATH in 2023 at about $200, trading at about $130 at the moment. That’s -35% within the last two years and almost as low as during the COVID crash in March 2020. The stock is up +34% only over the last decade, underperforming the S&P index by far (+175%)
Is it a steal right now?
If we compare some numbers today with 2020 we can see the following:
• Sales 2019 FY was 67B USD with +3.9% YoY
• Sales 2024 FY was 92B USD with +0.4% YoY
• Debt-to-Equity 2019 was 2.6
• Debt to Equity 2024 was 4.5
This means the Sales Growth has almost come to a halt last year. In Q1 2025 the company even saw a revenue decrease of -1.8%. Sales volume decreased by -3% but has been compensated partly by price increase.
In addition the debt of the company is growing. All not very good developments. Investors have become sceptical whether PepsiCo will be able to grow sales in a very challenging environment with customers that become more and more price sensitive during times of higher inflation.
My conclusion
For me PepsiCo is not a buy at the moment. You do not want a company which sales are flat or even declining with limited pricing power, despite their big brands. The dividend they are paying is not bad but how long can they sustain hiking it, if they already pay out 102% of their Free Cash Flow?
I would not sell the stock either if I would own it, which I don’t. Quite some insiders sold though during the past months (see below). Not a good sign if you‘re asking me.
For me PepsiCo currently is a HOLD position if you are invested and something to keep and eye on (caution). If they managed to bring Sales up again without loosing their margin, then it could become an interesting turnaround candidate.
What do you think about Pepsico at the moment?
