PepsiCo, a big name in the food and beverage industry with iconic brands such as Pepsi and Lays, is not only popular with consumers but also attracts the attention of investors.
Is PepsiCo (PEP) stock worthy of being included in your investment portfolio? In this article, we will review various aspects of PEP stock, from market performance, technical analysis, to the latest developments that can help you make wiser investment decisions.
A Glance at PepsiCo (PEP)
PepsiCo is one of the largest players in the global food and beverage industry. The company produces, markets, and distributes iconic brands such as Pepsi, Mountain Dew, Gatorade, Doritos, Lays, and Ruffles.
With an integrated business model, PepsiCo relies on bottlers, contract manufacturers, and third-party distributors in several markets to expand its reach.
In addition, the company has strategic partnerships with other brands, such as Starbucks, in the production and distribution of certain products.
PepsiCo operates its business in five main regions, with North America being the largest contributor, accounting for approximately 60% of total consolidated revenues.
Key Stats
- Market Cap: $208.7 billion
- P/E Ratio: 22.07
- EPS (Earnings Per Share): 6.81
- Dividend Ratio: 3.60% (or $5.42 per share)
- 52-Week Price Range: $141.51 – $183.41
- 3-Month Average Volume: 6.33 million shares
- Beta: 0.539 (indicating lower volatility than the market)
- EBITDA: $16.91 billion
- Gross Profit Margin: 54.9%
- Return on Assets (ROA): 9.4%
- Return on Equity (ROE): 48.9%
PepsiCo is also known for being a stable dividend payer, with a track record of increasing dividends for 52 consecutive years.
With solid financials and a strong business model, PEP stock remains attractive to investors looking for a balance between growth and passive income.
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PepsiCo Stock Price: Real-Time Data and Performance Chart
According to data from Investing.com and TradingView, PepsiCo (PEP) stock price is currently at $150.37, up $0.12 (+0.08%) in regular trading. In after-hours trading, the stock price increased to $151.25 (+0.59%).
The stock price range in the last trading was between $150.23 – $152.00, while in the last 52 weeks, the stock price has moved in the range of $141.51 – $183.41.
Analysts project a PEP price target of $173.44, which reflects a potential upside of +15.34% from the current price. Analyst sentiment shows a buy recommendation, while technical analysis is currently in a neutral position.
Regarding the historical stock movement chart, PEP stock performance in various time frames shows a diverse trend:
- Last 5 days: +1.27%
- Last 1 month: -1.50%
- Last 6 months: -15.92%
- Since the beginning of the year (YTD): -1.64%
- Last 1 year: -10.32%
- Last 5 years: +5.66%
Looking at historical data, PepsiCo shares have declined in the past year, but have continued to show stable long-term growth in the past five years.
Key Price Trends and Movements
- Market Cap: $206.31 billion
- P/E Ratio (TTM): 22.15
- Basic EPS (TTM): $6.81
- Revenue (FY): $91.47 billion
- Dividend Yield: 3.61%
- Beta (1Y): 0.23 (indicating lower volatility than the overall market)
One of PepsiCo’s strengths is its dividend stability, with the company having increased its dividend for 52 consecutive years.
With its fourth quarter (Q4 2024) financial results due in 5 days, investors will be watching to see if PepsiCo can meet its EPS projection of $1.94 per share and revenue forecast of $27.9 billion.
PEP stock remains attractive to investors seeking a balance between long-term growth and passive income through consistent dividends.
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Fundamental Analysis: Is PepsiCo Stock Worth Buying?
Citing the money.usnews.com, page, PepsiCo shares are currently trading at a price-to-earnings (P/E) ratio of 22.15, slightly higher than its historical average of around 20.
This indicates a relatively expensive valuation compared to past performance. In terms of earnings per share (EPS), PepsiCo recorded a figure of $6.81, with an estimated EPS growth of 8% per year in the next three years.
Meanwhile, the annual dividend reached $5.42 per share with a yield of 3.60%, making it attractive to investors who prioritize passive income.
In addition, PepsiCo has increased its dividend for 52 consecutive years, confirming its position as one of the dividend aristocrat stocks.
Regarding its growth strategy, PepsiCo continues to innovate its products to adapt to changing consumer tastes.
One of the strategic steps taken is the expansion into the healthy beverage segment, such as sparkling water with the Bubly product, which is claimed to have exceeded sales expectations.
On the snack side, the Frito-Lay North America division remains the largest contributor to profits, contributing 25% of total revenue, but 42% of operating profit.
Not only that, PepsiCo has also succeeded in increasing the price of its products while maintaining sales volume, so that profit margins remain stable despite the pressure of inflation in production costs.
International expansion is also an important factor in PepsiCo’s growth. In the Asian and Middle Eastern markets, revenue increased 7%, with beverage volume growth of 3.5% and snacks of 8%.
This shows that developing markets are still the main source of growth for the company.
As a company in the food and beverage sector, PepsiCo is included in the defensive stock category—stocks that tend to be stable in various economic conditions.
Demand for snacks and beverages remains high, even in situations of economic uncertainty, making PepsiCo an attractive choice for investors who want stability in their portfolios.
However, there are several challenges that need to be considered. Changing consumption patterns of the younger generation, especially in the soda segment, could be a drag on long-term growth.
While PepsiCo has diversified its beverage offerings, shifting consumer preferences remain a risk that must be managed well.
With an attractive dividend yield, adaptive growth strategy, and stability as a defensive stock, PepsiCo remains a solid choice for investors seeking a balance between dividend income and potential stock appreciation.
However, with the current valuation slightly higher than its historical average, investors may want to wait for a price correction before entering, or opt to accumulate the stock gradually for long-term investment.
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Technical Analysis: PepsiCo Stock Trading Strategy
PepsiCo (PEP) stock is currently in a downtrend with quite high volatility. Based on technical analysis, there are several important indicators that can be used to determine the optimal trading strategy.
The following is a discussion of technical indicators, support and resistance levels, and trading strategies that can be applied, as quoted from id.tradingview.com.
1. Popular Technical Indicators for PEP Stock
In technical analysis, several main indicators used to assess the movement of PepsiCo (PEP) stock include RSI, MACD, and Moving Averages.
- Relative Strength Index (RSI): Currently, PEP’s RSI is in the range of 45, indicating that this stock is in neutral territory, not yet entering the overbought (>70) or oversold (<30) area. This means that there is no strong indication whether the stock will soon rise or fall significantly.
- Moving Average Convergence Divergence (MACD): The MACD histogram shows a bearish signal, with the MACD line below its signal. This indicates that the short-term trend is still weak, and investors need to wait for confirmation before entering a long position.
- Moving Averages (MA):
- The 50-day MA is around $153, while the 200-day MA is around $160.
- Currently, the stock price of $150.37 is below both averages, indicating a medium to long-term downtrend.
2. Identify Chart Patterns: Support and Resistance
The main support is around $145, which is the point where the stock tends to get buying momentum. If the price falls below this level, there is potential for further declines.
The main resistance is in the range of $155-$160, which is the level that must be broken to confirm an upward trend reversal.
Currently, PEP shares are still in a consolidation phase with a tendency to weaken, so further confirmation is needed before entering a bullish trend.
3. Recommended Trading Strategy
- For Beginners
- You can wait for the price to fall closer to $145 before buying with a profit target of around $155.
- If you want to be safer, wait for the price to break through the MA 50 at $153 to confirm the trend change.
- Make sure to use a stop-loss below $140 to reduce risk.
- For Professionals
- You can take advantage of the sideways pattern with a range trading strategy between $145 – $155.
- If there is a breakout above $155, enter a buy position with a target of $160 – $165.
- Use a combination of RSI & MACD to confirm momentum before entering a large position.
Basically, PepsiCo shares are currently still in a downtrend with strong resistance at $155 – $160. Beginner traders should wait for the price to approach the $145 support or confirm the breakout before entering.
Meanwhile, professional traders can take advantage of the sideways pattern to find short-term trading opportunities.
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How to Buy PepsiCo (PEP) Shares in Indonesia
Although PepsiCo (PEP) shares are not available on the Indonesian stock exchange, investors can still buy them through international stockbrokers who support access to the US stock market. Here is a practical guide to buying PEP shares:
1. Choose an International Broker
Find a broker that offers US stock trading. Make sure the broker has clear regulations and supports investors from Indonesia.
2. Open a Trading Account
Register on the broker platform of your choice by filling in your personal data, uploading identity documents (KTP/Passport), and completing the verification process.
3. Deposit Funds
Make an initial deposit into your trading account using available payment methods, such as bank transfer or credit card.
4. Search for PepsiCo (PEP) Shares
Use the search feature on the broker platform and find PEP shares with the ticker code PEP on the NASDAQ exchange.
5. Make a Purchase
Select the number of shares you want to buy, determine the type of order (market order or limit order), then confirm the transaction.
6. Monitor and Manage Investments
After buying shares, monitor price movements and consider a long-term selling or investment strategy according to market analysis.
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Advantages and Disadvantages of Investing in PepsiCo Stocks
Investing in PepsiCo stock offers attractive opportunities, but also has its challenges. As a multinational company with a strong product portfolio, PepsiCo provides stability and growth potential for investors.
However, like any stock investment, there are risks that need to be considered. Here are the advantages and disadvantages of investing in PepsiCo stock.
1. Advantages
- Stability as a Defensive Stock
PepsiCo is included in the defensive stock category, which means its shares tend to be more stable even when the market is volatile. As a company in the food and beverage sector, demand for PepsiCo products remains strong regardless of economic conditions.
- Consistent Dividends
PepsiCo is known as a dividend aristocrat, having increased its dividend for more than 40 consecutive years. With a dividend yield of around 3.61%, this stock is attractive to investors looking for passive income.
- Product Diversification and Brand Strength
With a large brand portfolio such as Frito-Lay, Gatorade, Quaker, and Tropicana, PepsiCo has strong business diversification. Its presence in various food and beverage segments helps the company remain competitive in the global market.
2. Disadvantages
Potential Growth is Slower than the Technology Sector
As an established company in the food and beverage industry, PepsiCo’s growth is more stable but not as fast as the technology sector. Investors looking for stocks with high growth potential may be less interested in PEP.
Currency Fluctuation Risk for International Investors
For investors outside the US, currency exchange rates can affect profits. If the USD strengthens against the IDR, investment can be more expensive, while if it weakens, potential profits in the local currency can be eroded.
Conclusion
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In conclusion, the investment analysis in PepsiCo shares covers several important points. Fundamentally, this company shows stable performance with a strong product portfolio, providing long-term profit potential.
However, factors such as fluctuations in raw material costs and competition in the food and beverage industry remain challenges.
Technically, although PepsiCo shares have a fairly solid trend, short-term price fluctuations can still occur due to external factors and market dynamics.
Thus, investing in PepsiCo shares offers the opportunity for stability, but there are still risks that must be taken into account for investors who prioritize stability.
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FAQ
1.What is PepsiCo (PEP) stock?
PEP stock is a stock of PepsiCo, one of the global food and beverage industry giants.
2.Is PepsiCo stock suitable for beginner investors?
Yes, because of its stability as a defensive stock with consistent dividends.
3.How to buy PepsiCo stock in Indonesia?
You can buy PEP stock through an international broker that supports US stocks.
4.What is the difference between technical and fundamental analysis for PepsiCo stock?
Fundamental analysis focuses on a company’s financial performance, while technical analysis uses price charts to predict market trends.
5.Is PepsiCo stock risky?
Although relatively stable, risks remain, such as currency fluctuations or competitive challenges in the global market.
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