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Jason Del Vicario PepsiCo PEP-Q HOLD Jun 06, 2025

Operates in a cola duopoly with KO, good job creating shareholder value. He likes market leaders like these that have little to no direct competition, so this name fits that bill. That being said, it's a lot harder these days with consumer brands to establish a brand and build a moat. Today he could launch a cola company online, using Instagram and FB, with very little cost and effort, and with luck it could even go viral. Brands will have a tough time.

Very strong, well-established brand. PEP got into snacks, which are up against healthier lifestyles. He owns FEVR, take a look at that one.

Jason Del Vicario

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$130.080

Stock price when the opinion was issued

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Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

PAST TOP PICK

(A Top Pick Apr 04/24, Down 5.2%)Stockchase Research Editor: Michael O'Reilly

Our PAST TOP PICK with PEP has triggered its stop at $162. To remain disciplined, we recommend covering the position at this time.

DON'T BUY

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.

DON'T BUY

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.

DON'T BUY

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

DON'T BUY

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.

BUY

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

COMMENT

Was just downgraded. The consumer is fed up with shrinking product, like potato chips per bag. Consumer products must take the hit and lower prices like this, which will shrink margins. But it's worth it as opposed to this shrinkage.

BUY

Yields 4%, well-run and can start a position at 16x PE. They will right the ship.

DON'T BUY

An amazing company and major soft drinks maker. Shares are far from its last highs, so low that the dividend now pays 4.42%. Suppose RFK Jr. goes after companies that produce caloric snacks? Share are very undervalued, but who knows when shares will stop going down?

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