Highly Regarded

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

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

40% Discount TTM fundamentals · sector averages from covered peers

PEP trades at 23.9× TTM earnings — a 40% discount to its Consumer Staples sector average of 39.7× in our coverage.

The Numbers

P/E (TTM)

23.9×

Sector avg: 39.7×

P/S (TTM)

2.1×

Sector avg: 3.4×

Market Cap

$195.83B

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 $143.29 23.9×
WMT $110.60 38.7×
COST $950.43 50.9×
KO $82.96 29.4×

Is the Discount Justified?

July 6, 2026

PepsiCo's P/E multiple of 23.9x, a discount to the Consumer Staples sector average of 35.7x, can be understood within the context of its stable yet mature market. The company reported solid Q1 2026 results, with EPS exceeding expectations and revenue increasing 8.5% year-over-year. Positive volume and unit growth in its North American food and beverage segments, along with organic revenue growth and core operating margin expansion, demonstrate consistent operational strength. However, the broader consumer staples sector is characterized by slower growth potential and ongoing price pressures compared to more dynamic sectors. While PepsiCo's defensive qualities and consistent performance are appealing, these factors may not command a premium valuation relative to a sector average that could be influenced by companies with higher perceived growth opportunities or unique market positions.

Sources

Frequently Asked Questions

Is PEP overvalued or undervalued?
On trailing-twelve-month earnings, PEP trades at 23.9x versus a Consumer Staples sector average of 39.7x in our coverage — a 39.8% 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 COST KO WMT