Jim Cramer - Mad Money PepsiCo PEP-Q WEAK BUY Oct 09, 2024

Great company. Smart to expand into snacks, unlike KO, gives diversification. Executes very well. Issue is valuation, 25+ PE range. As a value investor, not interested. Not sure the Ozempic craze is a threat, need to see ramifications.

It has been a great company for the past 40 years. There has been a consumer revolt on price increases. The growth rate is flat to down in the short term.

The boring name in his portfolio. Yield is 3.1%, very secure, will grow around 6% over time. Very steady name, moving higher. With interest rates starting to fall, low-beta names like this will become more attractive. Paying 21x forward PE for 8% growth rate, not too bad. For the conservative part of your equity portfolio. 80% of shares are institutionally owned, so the smart money's in this stock.

A great consumer staples company. It's smart that they got into the snacks business, like Frito Lay. But it's a slow-growing, low-margin business. Pays a good dividend, but the valuation doesn't attract him, 15-20% too high.

GLP weight-loss drugs have hurt, and in some countries like India PEP has faced headwinds over their use of water, which is scarce is those places. 

It reports Tuesday. The weight-loss drugs make it hard for PEP to thrive. It pays a 3.6% dividend, though.

Historic growth story of Pepsi was the Frito-Lay franchise. Not the growth company it was. Still trades at a reasonably high multiple for its growth rate. International sources of revenue, so the strong USD is a major headwind.

Companies in the snack space have traded off on the fears of GLP-1. Volumes are starting to drop. Growth metrics just don't support the valuations.

Rallied 2.95% in today's sell-off as people sough safety in stocks that do well in a recession. Pays a 3% dividend.