Highly Regarded

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

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

43% Discount TTM fundamentals · sector averages from covered peers

PEP trades at 22.8× TTM earnings — a 43% discount to its Consumer Staples sector average of 39.7× in our coverage.

The Numbers

P/E (TTM)

22.8×

Sector avg: 39.7×

P/S (TTM)

2.0×

Sector avg: 3.4×

Market Cap

$187.37B

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 $137.10 22.8×
WMT $114.22 39.9×
COST $940.79 50.4×
KO $81.54 28.9×

Is the Discount Justified?

July 12, 2026

PepsiCo Inc.'s trailing twelve-month (TTM) P/E of 22.9x is at a discount compared to the Consumer Staples sector average of 35.3x. This valuation reflects a mixed recent performance, with the company reporting better-than-expected Q2 2026 net revenue growth of 6.4%, driven by international strength and effective pricing. However, North American organic revenue declined, pressured by tightening consumer budgets, rising inflationary pressures, and higher gas prices impacting impulse purchases. In response, PepsiCo is implementing price adjustments on certain snack brands and emphasizing healthier product offerings. The broader consumer staples sector, while typically defensive, has faced headwinds from inflation and a market preference for growth stocks, though a more constructive outlook is anticipated for 2026. PepsiCo has reaffirmed its fiscal 2026 guidance, projecting continued organic revenue and core EPS growth, suggesting a stable, albeit challenged, operational environment.

Sources

Frequently Asked Questions

Is PEP overvalued or undervalued?
On trailing-twelve-month earnings, PEP trades at 22.8x versus a Consumer Staples sector average of 39.7x in our coverage — a 42.5% 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

COST PG KO WMT