VALUATION HIGHLIGHTS

1. PFNA constitutes 36% of the Trefis price estimate for PepsiCo's stock.
2. PBNA constitutes 20% of the Trefis price estimate for PepsiCo's stock.
3. EMEA constitutes 18% of the Trefis price estimate for PepsiCo's stock.

WHAT HAS CHANGED?

Latest Earnings: Q2 FY'26

PepsiCo reported second-quarter net revenue of $24.18 billion, representing a 6% increase year-over-year and ahead of analysts' forecasts. Core EPS increased to $2.20, beating the consensus expectation of $2.19. Operational performance was supported by strong international expansion and global volume stabilization, despite persistent convenience channel softness and raw material inflation in North America.

Note: PepsiCo's FY'25 ended on December 27, 2025. Q2 FY'26 ended on June 13, 2026.

Strategic Integration of Prebiotic Soda Brand Poppi

PepsiCo successfully closed its acquisition of poppi, a leading prebiotic soda brand, for a net purchase price of $1.65 billion. The acquisition expands the company's functional beverage portfolio, aligning with modern consumer wellness trends and bolstering market presence among younger demographics.

POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE

Below are key drivers of PepsiCo's value that present opportunities for upside or downside to the current Trefis price estimate:

Frito-Lay North America

• Convenient Foods Organic Volume Growth: Snacking volumes are stabilizing as the company focuses on smaller pack sizes and promotional pricing. If convenient foods volume growth outpaces expectations, it will drive significant gross margin expansion for this high-margin division.


• Input Cost Management and Productivity Gains: Continued implementation of automated manufacturing and distribution solutions improves logistics efficiency. This trend offers solid upside to operational margin targets, offsetting persistent labor and domestic freight costs.

For additional details, select a division from the interactive Trefis split for PepsiCo at the top of the page.

BUSINESS SUMMARY

PepsiCo operates as a premier global food and beverage company, manufacturing and marketing a wide array of convenient foods, snacks, and carbonated and non-carbonated beverages across international markets.

SOURCES OF VALUE

Frito-Lay North America remains PepsiCo's most valuable division, acting as the primary engine for profitability and cash generation due to its immense pricing power and strong brand loyalty.

Dominant Snacking Installed Base

PepsiCo controls a massive share of the North American savory snacks market, leveraging iconic brands like Lay's, Doritos, and Cheetos to secure premier shelf space and maintain unmatched distribution efficiency.

Diversified Dual-Category Advantage

The unique combination of a massive food portfolio alongside a leading global beverage business allows PepsiCo to utilize joint retail programs, cross-promotional marketing, and shared supply chain infrastructure.

KEY TRENDS

Shift Toward Better-For-You and Functional Beverages

As consumers increasingly seek healthier alternatives with lower sugar content, PepsiCo is reorienting its portfolio through product innovation and targeted acquisitions of functional brands like poppi.

Productivity Initiatives and Cost Structure Simplification

PepsiCo is aggressively executing corporate efficiency programs, digital supply chain transformations, and localized production optimization to protect margins in a highly competitive retail pricing environment.