PEP
PepsiCo, Inc.
$130.96
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 3.9% above fair value
You pay
$130.96
Bear
$108.00
Fair
$126.00
Bull
$144.00
Bear
$108.00
-17.5%
$6.00 × 18x P/E
Fair
$126.00
-3.8%
$6.00 × 21x P/E
Bull
$144.00
+10.0%
$6.00 × 24x P/E
Adjust Assumptions
21.0x
6.0$
Key Value Driver
Normalized P/E multiple (21x base case)
Implied Market Multiple
21.8x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (46 analysts)
$155.64
Divergence from AlphaVal
19%
Summary
Applying a 21x P/E to adjusted EPS of $6.00, the base-case value is $126.00 per share. DDM cross-check: $241.04.
Warnings
The company pays out 97% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Dividend-based valuation: $241.04 (above our primary estimate by 91%). Large gaps may signal the dividend doesn't reflect full earning power.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples