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Atlas
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PepsiCo

PEPNASDAQConsumer Defensive

$150.37
$127.6052w range$171.48
Mkt cap $205.55B
Horizon

Scenario range

Bear · Base · Bull
What moves the model across cases
DriverBearBaseour central caseBull
Fair value / share$158.99$169.57$202.54
Implied upside vs price+5.7%+12.8%+34.7%
Terminal growth (g)2.00%2.00%2.00%
EBIT margin (Y5)13.6%13.6%14.5%
Intl Snacks growth5.0%5.0%9.0%
WACC6.00%6.00%6.00%

Bear and Bull re-solve the full model off the same WACC and terminal growth — only the segment-growth and Y5-margin overrides above move between cases.

Base case — segment growth and margins as authored in the assumption bundle.

DCF VerdictFair value Base case$169.57vs price $150.37
+12.8%Implied upside vs price

Our scenario-resolved DCF points above the current price. The reverse-DCF below quantifies the growth path the market is implying instead.

  • Bull$202.54
  • Base$169.57
  • Bear$158.99

Market vs. Our View

Reverse DCF
What aggregate Y1–Y5 growth justifies today's price
Market implied~1%Aggregate revenue growth Y1–Y5to justify today's price at $150.37
Our base case3%Aggregate revenue growth Y1–Y5 (blended)5-yr historical CAGR: 2.8%

Market is pricing in ~1.3% pa explicit-period revenue growth at $150.37 vs. our base case 2.8%. PEP's 5-year historical CAGR is 2.8% (yfinance).

DCF GaugeOur fair value vs price · FMP methods cross-check
▲ 12.8%$19.20$140.00$150.00$160.00$170.00$180.00Price$150.37DCF · Fair value$169.57
Independent cross-check FMP advanced $169.57 · levered $163.20Verdict Undervalued by 12.8%

Segment revenue — PEP

Top-line projection built up from reportable segments · USD millions
Y1–Y5 explicit period
PEP — per-segment revenue projection across 4 reportable segments + total, latest fiscal year plus Y1–Y5.
Segment20252026E2027E2028E2029E2030E
PepsiCo Beverages NA+1.2%
PEP 10-K FY25 segment disclosure
27,50027,83028,16428,50228,84429,190
Frito-Lay NA+2.2%
PEP 10-K FY25 segment disclosure
26,00026,57227,15727,75428,36528,989
Intl Beverages+3.5%
PEP 10-K FY25 segment disclosure
20,00020,70021,42522,17422,95023,754
Intl Snacks+5.0%
PEP 10-K FY25 segment disclosure + FMP analyst commentary on EM expansion
21,00022,05023,15324,31025,52626,802
Total revenue94,50097,15299,898102,740105,685108,734

DCF Model — PEP

As of May 20, 2026 · All figures in USD millions unless noted
PEP — DCF model: 4 historical fiscal years, 5 explicit projection years, and 5 fade years. Figures in USD millions.
Line item20222023202420252026E2027E2028E2029E2030E2031E2032E2033E2034E2035E
Revenue86,39291,47191,85493,92597,15299,898102,740105,685108,734111,679114,507117,202119,754122,149
growth %—5.9%0.4%2.3%3.4%2.8%2.8%2.9%2.9%2.7%2.5%2.4%2.2%2.0%
EBIT11,64412,23612,86511,36512,43512,98713,56214,16214,78815,18815,57315,94016,28716,612
margin %13.5%13.4%14.0%12.1%12.8%13.0%13.2%13.4%13.6%13.6%13.6%13.6%13.6%13.6%
NOPAT9,7699,81310,3679,20310,04810,49310,95811,44311,94912,27212,58312,87913,16013,423
+ D&A3,2803,5183,8154,1784,3724,4954,6234,7564,8935,0265,1535,2745,3895,497
− CapEx5,2075,5185,3184,4154,5664,6954,8294,9675,1115,2495,3825,5095,6285,741
− ΔNWC−888−337−1,478−1,64510899998887
FCFF8,7308,15010,34210,6119,84410,28510,74411,22211,72212,04012,34512,63712,91213,171
Discount factor————0.9430.8900.8400.7920.7470.7050.6650.6280.5920.559
PV of FCFF————9,2879,1559,0228,8918,7618,4908,2137,9317,6467,358
Assumptions & sourcesInline source on every input · derivations on computed rows

Macro

Risk-free rate
4.5%
US 10Y Treasury, Federal Reserve H.15, 5/20/26
Equity risk premium
5.0%
Damodaran implied ERP, Jan 2026 update
Cost of debt (pre-tax)
5.0%
Blended yield on PEP's outstanding senior notes, FMP bond data 5/20/26
Tax rate
19.2%
Median of trailing-4Y effective tax rates, yfinance income statement
Terminal growthThe perpetual growth rate applied to free cash flow beyond the 10-year forecast. Drives the terminal value, which is the bulk of enterprise value — it must stay below the long-run economy growth rate.
2.0%
Long-run staple category growth, CBO 10-yr outlook

Capital structure

Beta
0.39
FMP profile.beta, 5/20/26
Weight equity
80.5%
Derived: Market cap ÷ (Market cap + Total debt)
Weight debt
19.5%
Derived: Total debt ÷ (Market cap + Total debt)
Cost of equity
6.5%
Derived: Rf + β · ERP
After-tax cost of debt
4.0%
Derived: Pre-tax cost of debt × (1 − tax rate)
WACCWeighted Average Cost of Capital — the blended required return on the company's equity and debt, weighted by their market values. It's the discount rate that converts future free cash flows into today's dollars.
6.0%
Derived: w_e · CoE + w_d · (After-tax CoD)

Drivers

EBIT margin Y1
12.8%
Trailing 4-quarter operating margin, yfinance
EBIT margin Y5
13.6%
Atlas: productivity savings + premiumization by Y5
D&A % of revenue
4.5%
5-yr historical median, yfinance
CapEx % of revenue
4.7%
5-yr historical median, yfinance
ΔNWC % of ΔRevenue
0.3%
5-yr ΔNWC / ΔRev median, yfinance
Valuation BridgeBase case
USD millions, except per-share
Σ PV of FCFF (10y)Free Cash Flow to the Firm — NOPAT plus depreciation, less capital expenditure and the change in net working capital. It's the unlevered cash the business throws off before financing. We discount 10 years of it back to present value.
84,754
+ PV of terminal value
187,849
= Enterprise value
272,603
− Total debtTotal debt less cash is net debt — the bridge from enterprise value to equity value. We subtract debt and add back cash because equity holders own what's left after creditors are paid.
49,901
+ Cash & equivalents
9,159
= Equity value
231,861
÷ Shares outstanding (M)
1,367
= Fair value / share
$169.57+6.3%
vs. current price
$150.37
Implied upside
+12.8%+0.7%

Sensitivity

5×5 · WACC × Terminal g
Cells = per-share fair value · tone vs. $150.37 current price
PEP sensitivity matrix flexing WACC down rows and terminal growth across columns, holding everything else at base.
1.50%1.75%2.00%2.25%2.50%
5.00%$207.20$220.89$236.87$255.76$278.42
5.50%$177.09$187.04$198.40$211.52$226.83
6.00%$153.69$161.16$169.57$179.10$189.99
6.50%$134.99$140.75$147.16$154.32$162.38
7.00%$119.69$124.24$129.24$134.77$140.91

Green ≥ price + 5% · Red ≤ price − 5% · Neutral within ±5% · Outline = active scenario's (WACC, g).