PepsiCo Inc

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PEP : NYSE : Consumer Goods
$118.38 -0.72 | -0.6%
Today's Range: 118.27 - 119.39
Avg. Daily Volume: 3323800.0
08/17/17 - 3:59 PM ET

Financial Analysis


PEPSICO INC's gross profit margin for the second quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. The company has grown sales and net income during the past quarter when compared with the same quarter a year ago, however, it was unable to keep up with the growth of the average competitor within its industry. PEPSICO INC has average liquidity. Currently, the Quick Ratio is 1.12 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 1.27% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

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Income Statement Q2 FY17 Q2 FY16
Net Sales ($mil)15710.015395.0
EBITDA ($mil)3578.03573.0
EBIT ($mil)3024.03010.0
Net Income ($mil)2105.02005.0


Balance Sheet Q2 FY17 Q2 FY16
Cash & Equiv. ($mil)17160.013379.0
Total Assets ($mil)76943.072711.0
Total Debt ($mil)39484.035621.0
Equity ($mil)12404.012248.0


Profitability Q2 FY17 Q2 FY16
Gross Profit Margin58.5159.18
EBITDA Margin22.7723.2
Operating Margin19.2519.55
Sales Turnover0.820.86
Return on Assets8.857.13
Return on Equity54.9242.34
Debt Q2 FY17 Q2 FY16
Current Ratio1.321.4
Debt/Capital0.760.74
Interest Expense265.0255.0
Interest Coverage11.4111.8


Share Data Q2 FY17 Q2 FY16
Shares outstanding (mil)1426.01441.0
Div / share0.810.75
EPS1.461.38
Book value / share8.78.5
Institutional Own % n/a n/a
Avg Daily Volume3329780.03864612.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 36.56 for the Beverages industry and a value on par with the S&P 500 average of 24.31. For additional comparison, its price-to-book ratio of 13.38 indicates a significant premium versus the S&P 500 average of 3.03 and a significant premium versus the industry average of 7.30. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. The valuation analysis reveals that, PEPSICO INC seems to be trading at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
PEP 24.71 Peers 36.56   PEP 17.04 Peers 20.38

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

PEP is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

PEP is trading at a discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
PEP 20.93 Peers 24.80   PEP 1.36 Peers 1.62

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

PEP is trading at a valuation on par with its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

PEP trades at a discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
PEP 13.38 Peers 7.30   PEP 32.67 Peers 9.81

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

PEP is trading at a significant premium to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

PEP is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
PEP 2.62 Peers 4.48   PEP 1.81 Peers 13.88

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

PEP is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

PEP significantly trails its peers on the basis of sales growth

 

 

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