NEW YORK (TheStreet) -- Shares of PepsiCo (PEP) - Get PepsiCo, Inc. Report continue to climb, higher by 2.05% to $97.70 in afternoon trading on Thursday, one day after the stock rallied on reports that Brazilian investment firm 3G Capital Partners is talking about the possibility of acquiring the global food and beverage company, according to the Wall Street Journal.

3G has received about $5 billion in pledges from its investors for a new takeover fund, the Journal added.

The Brazilian investment firm could team up with Anheuser-Busch InBev (BUD) - Get Anheuser-Busch InBev SA/NV Sponsored ADR Report  for a PepsiCo acquisition, given the mega size of the potential transaction, the Journal noted.

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3G is also reportedly considering an acquisition of other companies including Campbell Soup (CPB) - Get Campbell Soup Company Reportand Kraft Foods Group (KRFT) .

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The private equity firm has acquired condiment giant H.J. Heinz (HNZ) , and more recently, completed an inversion deal between Burger King (BKW)  and Tim Horton's (THI) .

Separately, TheStreet Ratings team rates PEPSICO INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate PEPSICO INC (PEP) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, solid stock price performance, growth in earnings per share and good cash flow from operations. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • PEP's revenue growth has slightly outpaced the industry average of 0.5%. Since the same quarter one year prior, revenues slightly increased by 1.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • PEPSICO INC has improved earnings per share by 7.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, PEPSICO INC increased its bottom line by earning $4.32 versus $3.92 in the prior year. This year, the market expects an improvement in earnings ($4.60 versus $4.32).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Beverages industry and the overall market, PEPSICO INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $4,021.00 million or 10.25% when compared to the same quarter last year. In addition, PEPSICO INC has also modestly surpassed the industry average cash flow growth rate of 1.51%.
  • You can view the full analysis from the report here: PEP Ratings Report

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