PepsiCo (PEP – Research Report), the Consumer Defensive sector company, was revisited by a Wall Street analyst on April 1. Analyst Zheng Feng Chee from DBS maintained a Buy rating on the stock and has a $202.00 price target.
Zheng Feng Chee has given his Buy rating due to a combination of factors including PepsiCo’s diverse geographical presence and product range. The company’s revenue is spread across North America, Europe, Latin America, and other regions, providing a buffer against regional economic downturns. Additionally, PepsiCo’s strong presence in both convenient foods and beverages, with a significant 59% revenue contribution from food products, showcases a balanced portfolio that can leverage varying consumer preferences.
The analyst also recognizes the potential for international market growth, as current consumption levels of PepsiCo products in these markets are significantly lower than in the United States. With strategic capital expenditure focused on international expansion, PepsiCo is expected to achieve more affordable pricing and good margins. Furthermore, the company’s outlook for organic revenue growth, coupled with a consistent track record of dividend increases and a strong free cash flow, underpins the Buy recommendation. PepsiCo’s commitment to digitalization and supply chain optimizations are anticipated to drive margin expansion and contribute to a projected 7-9% core constant currency EPS growth for 2024.
In another report released on March 18, Morgan Stanley also upgraded the stock to a Buy with a $190.00 price target.
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PepsiCo (PEP) Company Description:
PepsiCo, Inc. is a food and beverage company that owns brands like Frito-Lay, Gatorade, Pepsi-Cola, Quaker, Cheetos, Doritos, Aquafina and Tropicana. The company was founded by Donald M. Kendall, Sr. and Herman W. Lay in 1965 and is headquartered in Purchase, NY.
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