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General information
PepsiCo, Inc. operates worldwide beverage, snack, and food businesses. The Company manufactures or uses contract manufacturers, markets, and sells a variety of grain-based snacks, carbonated and non-carbonated beverages, and foods in countries throughout the world.
  • Pretty weak financial results growth rate 3.6% (average between last period year over year growth for revenue and EBITDA), there is acceleration compared to average historical growth rates (1.6%)
  • Dividend yield for the last twelve months 2.9%
  • Free cash flow yield -0.2% (LTM)
  • Share price is 39.5% higher than minimum and 8.7% lower than maximum for the last 3 years
  • The company is overvalued by EV / LTM EBITDA multiple compared to target level (17.6x vs 17.0x)
  • Fundamental value created in LTM (estimate) 1.6%
Key Financials
Ticker: PEP
Share price, USD: 134.17
Common stocks: 1 394 435 338
Dividend Yield:  2.9%
FCF Yield LTM: -0.2%
EV / LTM EBITDA: 17.6x
Last revenue growth (y/y):  5.3%
Last growth of EBITDA (y/y):  2.0%
Historical revenue growth:  2.7%
Historical growth of EBITDA:  0.5%
Target EV / EBITDA (hist 75% percentile): 17.0x
Express share price potential: -3.6%
Fundamental value created in LTM: 1.6%
EV / LTM EBITDA mutiple calculation
Market Cap ($m): 187 091
Net Debt ($m): 34 978
EV (Enterprise Value): 222 069
EBITDA LTM ($m): 12 650
EV / LTM EBITDA: 17.6x

Revenue and EBITDA

Quarterly values ($m)

Change (y/y)

Cash Flow

Free Cash Flow ($m)

Net Debt / Cash and Equivalents ($m)

Share price and dividends

Share price

Payment USD per share

Multiple and potential

EV / LTM EBITDA and 75% percentile

Potential dynamics

Value Creation

Fundamental Value Creation is calculated as ratio of value created in the last period to current market cap of the company.

The fundamental value can be created in two ways:
• cash generation in form of dividend payments or debt reduction or share buybacks
• growth of the company enterprise value through improving financial results

The growth of enterprise value in the last period is estimated as product of:
• annualized increase of EBITDA in the last reporting period year over year
• relevant EV/EBITDA multiple (average between actual EV/EBITDA for the company and average general level of 10.0x is applied)

Parameter
#
Formula
Value
    
    
            EBITDA (pre LTM Q)
(1)
3 548
            EBITDA (last Q)
(2)
3 620
            EBITDA LTM
(3)
12 650
    
    
        EBITDA LTM / last Q
(4)
(3) / (2)
3.494
    Gain of EBITDA (mln $)
(5)
( (2)-(1) ) * (4)
252
    
    
            EV
(6)
222 069
        Mult
(7)
(6) / (3)
17.6x
        Mult common
(8)
const
10.0x
    Mult avg
(9)
avgerage
13.8x
    
    
    Equity+
(10)
(5) * (9)
3 466
    FCF LTM
(11)
-410
    
    
Value+
(12)
(10) + (11)
3 056
Cap
(13)
187 091
    
    
Fundamental value creation
(14)
(12) / (13)
1.6%

Potential

EBITDA LTM       12 650
 
EBITDA E       12 674
Mult aim       17.0x
 
EV E       215 302
NetDebt corr       35 011
 
Cap E       180 292
Cap       187 091
Growth potential            -3.6%