Highly Regarded

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

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

41% Discount TTM fundamentals · sector averages from covered peers

PEP trades at 23.4× TTM earnings — a 41% discount to its Consumer Staples sector average of 39.6× in our coverage.

The Numbers

P/E (TTM)

23.4×

Sector avg: 39.6×

P/S (TTM)

2.0×

Sector avg: 3.6×

Market Cap

$191.78B

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 $140.33 23.4×
WMT $104.83 36.7×
COST $943.80 50.6×
KO $88.72 31.5×

Is the Discount Justified?

August 30, 2026

PepsiCo's P/E multiple of 23.5x is below the Consumer Staples sector average of 35.5x. This valuation reflects a mixed performance across its diverse portfolio. In Q2 2026, net revenue increased 6.4% year-over-year, with organic revenue up 2.4%. However, North American organic revenue declined 0.5%, with PepsiCo Foods North America revenues falling 2%, while international organic revenue grew 7%. The company reaffirmed its full-year 2026 guidance for organic revenue growth of 2-4% and core EPS growth of 4-6%, supported by productivity initiatives. The domestic market's softness, despite international strength, may contribute to the current valuation discount.

Sources

Frequently Asked Questions

Is PEP overvalued or undervalued?
On trailing-twelve-month earnings, PEP trades at 23.4x versus a Consumer Staples sector average of 39.6x in our coverage — a 40.9% 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

PG WMT COST KO