Is PEP a good stock to buy? We came across a bullish thesis on PepsiCo, Inc. on X.com by @MoneyShow. In this article, we will summarize the bulls’ thesis on PEP. PepsiCo, Inc.’s share was trading at $160.15 as of March 11th. PEP’s trailing and forward P/E were 26.69 and 18.59, respectively according to Yahoo Finance.
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PepsiCo, Inc. engages in the manufacture, marketing, distribution, and sale of various beverages and convenient foods worldwide. PEP presents a compelling turnaround opportunity for 2026, driven by activist-led operational improvements and an attractive valuation.
The company, a global leader in salty snacks with a 23% market share and the second-largest non-alcoholic beverage portfolio, has faced headwinds from input cost inflation, margin compression, weak consumer demand, and changing tastes, causing its flagship beverage to slip to fourth in U.S. volumes.
Revenue totaled approximately $91.85 billion in 2024 and $92.37 billion over the trailing twelve months, reflecting resilient underlying scale despite these challenges. Activist investor Elliott Investment Management’s $4 billion stake, coupled with a recent settlement with the company, is expected to catalyze meaningful change.
PepsiCo is now focused on cutting expenses, reducing its product portfolio by 20%, lowering food prices, and optimizing its supply chain, while also implementing leadership changes including a new CFO. These measures are likely to improve margins, restore market share, and enhance operational efficiency over the medium term.
Shareholders benefit from a consistent 3.7% dividend yield, supported by a 53-year streak of dividend increases and stable cash flows, while the company’s buyback program adds additional upside potential.
Trading at an 18.6x earnings multiple, PepsiCo remains below its historical five- and ten-year ranges, offering investors an attractive entry point with limited downside. If the operational turnaround takes hold, the combination of improved margins, strategic efficiency gains, and shareholder returns positions PepsiCo for significant rerating, making it a bullish long-term investment with strong upside potential.
Previously, we covered a bullish thesis on PepsiCo, Inc. (PEP) by Kroker Equity Research in October 2024, which highlighted the company’s strong brand portfolio, pricing power, and reliable dividends. PEP’s stock price has depreciated by approximately 8.38% since our coverage despite strong fundamentals. @MoneyShow shares a similar view but emphasizes activist-led operational improvements, portfolio cuts, cost reductions, and leadership changes as catalysts for a potential turnaround.
PepsiCo, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 74 hedge fund portfolios held PEP at the end of the fourth quarter which was 68 in the previous quarter. While we acknowledge the risk and potential of PEP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PEP and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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Disclosure: None.
