Should You Buy PepsiCo Stock Because Its International Business Keeps Accelerating?

PepsiCo (PEP) stock traded at $129.75 on September 18, the lowest price of its past 52 weeks. The worry is North America, where sales of snacks and drinks have disappointed. Yet the part of PepsiCo that sells outside the U.S. is growing faster and earning more on each sale. The share price appears to give that part little credit.

Why Has PepsiCo Stock Fallen To Its Lowest Price In A Year?

Over the past 12 months, the stock fell 4.4%, while the S&P 500 gained 15.9% on a price-return basis. The CFO said North America was softer than management expected in the second quarter of 2026. The CEO blamed a weaker consumer, squeezed mainly by gas prices.

The convenience and gas channel was particularly soft, and PBNA, the North American beverage unit, saw its operating margin fall about 90 basis points in the quarter on a lower gross profit rate. The CFO traced about half of that gross profit rate decline to the commercial arrangement around Alani, a partner brand.

One analyst asked whether PepsiCo must spend more and accept an earnings reset to revive growth. The CEO rejected that, pointing to record productivity in the first half of 2026. One productivity project is combined mixing centers, which hold inventory from the snack and drink businesses in one place and are now scaling from a test in Texoma.

What Is PepsiCo’s International Business Doing That North America Is Not?

PepsiCo took in $96.9 billion of revenue over the past twelve months, up 5.6%. It already accounts for two-thirds of the company’s beverage volume and over half of its food volume. On the second-quarter 2026 call, the CEO put its growth at 7% and said it was accelerating.

That growth is not being bought with thinner profits. The CFO said international operating margin grew by a full point in the second quarter, the same quarter PBNA’s margin fell. Management calls the international business profit accretive.

It has also held up against the same fuel shock that hurt the U.S. The CEO said markets with elevated gas prices, from Vietnam to the Middle East, remained very resilient. So the region the bears worry about is not the region carrying the growth.

Is The Price Giving PepsiCo Any Credit For Growth Abroad?

On sales, the stock trades at 1.8 times, level with its lowest in 10 years. That multiple may mean investors are pricing PepsiCo on its weakest region. A cheap multiple helps only if the business behind it is not shrinking. Total revenue is still rising, and the international business is both growing and gaining margin.

The case has limits. Management reaffirmed its full-year 2026 guidance, but the CFO said earnings may land toward the low end of it. The CFO also expects North America to improve only gradually, at a slower pace than planned. Management says it will fund the U.S. repair without starving the international business.

The thing to watch is whether international growth holds near its second-quarter pace when third-quarter 2026 results arrive. If it does, the low multiple looks like a discount on a business that is still working. To run the same check on other stocks that have fallen hard, start with our dip-buying screen.

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