PepsiCo, Inc. (PEP): A Bull Case Theory

We came across a bullish thesis on PepsiCo, Inc.  on Value investing subreddit by raytoei. In this article, we will summarize the bulls’ thesis on PEP. PepsiCo, Inc. 's share was trading at $152.16 as of August 19^th. PEP’s trailing and forward P/E were 27.72 and 18.94 respectively according to Yahoo Finance.

PepsiCo delivered resilient second-quarter results, posting revenue of $22.73 billion, slightly above analyst expectations of $22.27 billion, despite a modest decline in overall volumes. The company saw improving organic volume and market-share trends in its North America food and beverage businesses as the quarter progressed, aided by stepped-up commercial activity, value-driven offerings, and new product innovations.

Pepsi’s beverage unit gained share in carbonated soft drinks, supported by the continued strength of Pepsi Zero Sugar, while snacks also stabilized. Volumes fell 1% in North America foods and 2% in beverages, with strength in Latin America and Asia Pacific offset by weakness in Europe, the Middle East, and Africa.

Net income was $1.26 billion, or 92 cents a share, compared with $3.08 billion, or $2.23 a share, a year earlier, reflecting a $1.86 billion impairment charge tied to Rockstar and Be & Cheery. Excluding one-time items, adjusted earnings of $2.12 per share topped analyst estimates of $2.03. CEO Ramon Laguarta emphasized that the company is effectively navigating a challenging operating backdrop while accelerating net revenue growth relative to the prior quarter.

Looking ahead, Pepsi expects organic revenue growth this year, with earnings flat on a constant-currency basis. Foreign-exchange headwinds are projected to cut revenue and adjusted earnings by about 1.5 percentage points, an improvement from prior forecasts of 3 percentage points due to dollar weakness. Pepsi aims to sustain momentum through innovation, cost-optimization, automation, and digitalization to mitigate supply chain pressures and drive long-term productivity. Shares rose 3.1% premarket to $139.50 following the report.

Previously we covered a bullish thesis on PepsiCo, Inc. (PEP) by Investing Lawyer in February 2025, which highlighted its diversified model, dividend resilience, and long-term stability. The company’s stock price has remained flat since our coverage. This is because near-term headwinds offset growth, though fundamentals remain intact. Raytoei shares a similar view but emphasizes quarterly results, innovation, and moderated FX headwinds.

PepsiCo, Inc.  is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 71 hedge fund portfolios held PEP at the end of the first quarter which was 69 in the previous quarter. While we acknowledge the potential of PEP as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.