Highly Regarded

Is PepsiCo Inc. (PEP) Stock Undervalued or Overvalued?

Trailing-twelve-month multiples vs Consumer Staples sector peers in our coverage

49% Discount TTM fundamentals · sector averages from covered peers

PEP trades at 21.9× TTM earnings — a 49% discount to its Consumer Staples sector average of 42.6× in our coverage.

The Numbers

P/E (TTM)

21.9×

Sector avg: 42.6×

P/S (TTM)

1.9×

Sector avg: 3.8×

Market Cap

$179.74B

EPS (TTM): $6.00

Revenue (TTM)

$93.92B

Net income: $8.29B

Consumer Staples Peer Comparison

How PEP's multiples stack up against sector peers we cover. Click any peer for its own valuation breakdown.

Stock Price P/E (TTM)
PEP This page $131.52 21.9×
WMT $118.83 41.5×
COST $989.19 53.0×
KO $93.85 33.3×

Is the Discount Justified?

October 4, 2026

PepsiCo's P/E of 21.0x, a discount to the consumer staples sector average of 34.3x, reflects the stable yet often lower-growth nature of the industry. The company's valuation is typically supported by its strong brand portfolio, consistent cash flows, and dividend history. Factors influencing its current multiple include consumer spending trends, which can impact volume, and the company's ability to implement pricing strategies to offset input cost inflation. Ongoing product innovation and expansion into healthier snack and beverage options are crucial for maintaining market share and driving organic growth in a competitive global market. The discount may indicate market expectations for more moderate growth compared to some sector peers.

Sources

Frequently Asked Questions

Is PEP overvalued or undervalued?
On trailing-twelve-month earnings, PEP trades at 21.9x versus a Consumer Staples sector average of 42.6x in our coverage — a 48.5% discount. Whether that's justified depends on growth, margins, and risk; see the context above.
What does the P/E ratio tell you?
Price-to-earnings compares a company's share price with its per-share profits. A higher multiple means investors pay more per dollar of earnings — often for faster expected growth — while a lower one can signal slower growth or higher perceived risk.
Why compare against the sector average?
Valuation multiples vary structurally between industries — software typically trades richer than banks or energy. Comparing PEP with its own Consumer Staples peers is more informative than comparing against the whole market.
Is a cheap stock automatically a good buy?
No. A discount can be justified by weak growth or elevated risk (a "value trap"), and a premium can be earned by quality and consistency. Valuation is one input — pair it with the fundamentals and the AI context on this page.

Methodology

Multiples are computed from trailing-twelve-month fundamentals (from company filings) and the latest share price: P/E is price ÷ diluted EPS, and P/S is market cap ÷ revenue. Sector averages use the Consumer Staples names in our 50-stock coverage with positive earnings — a deliberately like-for-like, if imperfect, benchmark.

Stocks with negative trailing earnings are compared on price-to-sales instead. Multiples update with prices and fundamentals; AI context refreshes weekly.

Not Financial Advice

This page is for education and information only. Indicators are mechanical calculations, AI commentary can contain errors, and nothing here is a recommendation to buy or sell any security. Do your own research and consider consulting a qualified financial advisor. See our full disclaimer.

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Same question, Consumer Staples peers

KO WMT PG COST