Signal Ledger LabSignal Ledger valuation · PEP
PepsiCo Inc
What the shares are worth today on our research (management’s own targets for each business): every line valued at the end of FY2030, net debt rolled forward, then discounted back to Sep 5, 2026.
- Business value at FY2030
- $291B
- FY2030 revenue
- $120B
- FY2030 EPS · P/E
- $10.72 · 18×
- Discount rate (WACC · equity)
- 7.29% · 8.74%
Latest quarter in this research: Q3 2026
Reported Oct 8, 2026 for the quarter to Sep 5, 2026 (company release ↗). This valuation already reflects these results (researched Oct 23, 2026).
| Segment | Revenue | vs a year ago | Operating income | Margin |
|---|---|---|---|---|
| PBNA | $7.71B | +5% | $1.06B | 13.7% |
| PFNA | $6.50B | +0.0% | $1.33B | 20.5% |
| EMEA | $5.41B | +8% | $0.90B | 16.6% |
| Latin America Foods | $3.02B | +14% | $0.62B | 20.7% |
| International Beverages Franchise | $1.40B | +8% | $0.56B | 40.1% |
| Asia Pacific Foods | $1.23B | +10% | $0.17B | 14.2% |
- Reported sales+5.6%, organic+3.1%; core operating margin 16.9% versus 17.3%.
- FY2026 revenue growthguideabout 6%; core tax lowered to 21% and coreEPSgrowth 2.5-3.5%.
- PFNA reported salesflat and operating profitdown 13%; international segmentsgrew.
- GAAP operating profit 4.260B includes derivative/acquisition credits; core 4.277B uses another definition.
What each business is worth
| Business | Model | FY2030 revenue | Value today | Per share | 2030 multiple | Value from beyond FY2030 |
|---|---|---|---|---|---|---|
| PBNA | Margin | $36B | $34B | $25.29 | 14.2× EBIT | 71% |
| PFNA | Margin | $35B | $136B | $99.50 | 16.6× EBIT | 69% |
| EMEA | Margin | $23B | $49B | $35.63 | 15.2× EBIT | 68% |
| Latin America Foods | Margin | $13B | $41B | $29.86 | 14.4× EBIT | 66% |
| International Beverages Franchise | Margin | $6.4B | $36B | $26.53 | 16.1× EBIT | 67% |
| Asia Pacific Foods | Margin | $5.9B | $9.1B | $6.65 | 14.6× EBIT | 68% |
| Company costsHead-office costs no segment carries, valued as one negative business | Cost line | — | −$47B | −$34.84 | — | 72% |
| All businesses | $120B | $257B | $188.61 |
From 2030 back to today
- Enterprise value at end of FY2030$291B
- Less net debt at FY2030$28B
- Equity value at FY2030$262B
- ÷ (1 + 8.74%)^4.3 years at the cost of equity$183B
- + dividends paid on the way, discounted$29B
This reconciliation checks the published Signal Ledger valuation against the net-debt path. The difference is 2.2%, inside our 5% tolerance.
From businesses to one share
- All businesses, valued today$257B
- − borrowings$52B
- − finance leases$0B
- − preferred and minority claims$0.2B
- + cash and short-term investments$11B
- ÷ diluted shares1.363B
- Signal Ledger valuation$158.58
Year by year to FY2030
| Fiscal year | Revenue | EBITDA | Capex | Free cash flow | Net debt at year end |
|---|---|---|---|---|---|
| FY2026 | $100B | $16B | $4.7B | $8.5B | $41B |
| FY2027 | $104B | $17B | $4.9B | $9.7B | $40B |
| FY2028 | $109B | $19B | $5.1B | $11B | $38B |
| FY2029 | $114B | $22B | $5.4B | $13B | $34B |
| FY2030 | $120B | $24B | $5.6B | $14B | $28B |
What must be true
- PBNA grows revenue from $29.6B in FY2026 to $36.0B in FY2030 (1.2×).
- PFNA grows revenue from $27.5B in FY2026 to $35.1B in FY2030 (1.3×).
- EMEA grows revenue from $19.5B in FY2026 to $23.0B in FY2030 (1.2×).
- Latin America Foods grows revenue from $12.5B in FY2026 to $13.5B in FY2030 (1.1×).
- International Beverages Franchise grows revenue from $5.4B in FY2026 to $6.4B in FY2030 (1.2×).
- Asia Pacific Foods grows revenue from $5.1B in FY2026 to $5.9B in FY2030 (1.2×).
- PBNA raises its EBIT margin from 3.9% to 7.9%.
- PFNA raises its EBIT margin from 22.4% to 26.4%.
- EMEA raises its EBIT margin from 11.7% to 15.7%.
- Latin America Foods raises its EBIT margin from 19.1% to 23.1%.
- International Beverages Franchise raises its EBIT margin from 35.4% to 39.4%.
- Asia Pacific Foods raises its EBIT margin from 8.0% to 12.0%.
- The company spends $25.7B of capital expenditure through FY2030.
- Net debt peaks at $41.0B in FY2026 and stays financeable.
What the price implies
At our discount rate, the price assumes less than our research overall: one combination matching $138.83 is about $106.4B of FY2030 sales (growth of about 1.7% a year from FY2026) with 18.4% GAAP EBIT margin — versus $119.9B and 18.4% GAAP EBIT margin in our research.
At the research price of $138.83 (2026-10-23), the price asks less than our assumptions overall. These are operating requirements at that price, not additional valuations or forecasts.
If sales and margins changed together
Each row matches the same research price at our unchanged discount rate, by scaling every operating line's margin by one common factor. Sales cover margin and capacity lines only; other valuation lines stay fixed. Margins are revenue-weighted within each metric, before separately modeled corporate costs and eliminations. The conclusion uses the row at our research margins when sales alone can match the price, otherwise the solved row needing the least sales growth; this is a trade-off between growth and profitability, not a forecast.
| FY2030 sales factor | FY2030 sales | FY2026–30 CAGR | Required FY2030 margin | Requirement |
|---|---|---|---|---|
| 0.89×At research margins | $106.4B | 1.7% | 18.4% GAAP EBIT | Within margin guardrails |
| 1.50× | $179.8B | 15.9% | 12.8% GAAP EBIT | Within margin guardrails |
| 2.00× | $239.7B | 24.6% | 10.6% GAAP EBIT | Within margin guardrails |
| 3.00× | $359.6B | 37.9% | 8.5% GAAP EBIT | Within margin guardrails |
CAGR uses $99.6B of same-scope FY2026 sales from the published model or its sourced research base, over four fiscal years. “Within margin guardrails” checks numeric limits only, not commercial plausibility. Each line and year must stay at or below 50.0% GAAP EBIT and 100% EBITDA, or our research margin where that is higher; capacity EBIT uses the engine's equipment depreciation. Unsolved margins are not extrapolated.
- Implied discount rate
- 7.9%
- All-business FY2030 sales factor
- 0.89×
The WACC that makes model value equal the price, shifting WACC and cost of equity by the same amount. Model: 7.3% WACC · 8.7% cost of equity.
FY2030 revenue would need to reach $106.4B (model: $119.9B) across the margin and capacity businesses. FY1 stays fixed; the sales change ramps to FY2030 and stays at that factor thereafter.
If only one business changed
Showing the 4 largest of 6 eligible businesses by value today. Revenue and margin are separate alternatives; these requirements are not added together.
PFNA
- Revenue alone
- FY2030 revenue would need to reach $27.3B (model: $35.1B).
- Margin alone
FY2030 EBIT margin would need to reach 21.4% (model: 26.4%).
EMEA
- Revenue alone
- FY2030 revenue would need to reach $7.2B (model: $23B).
- Margin alone
FY2030 EBIT margin would need to reach 7.7% (model: 15.7%).
Latin America Foods
- Revenue alone
- FY2030 revenue would need to reach $3.2B (model: $13.5B).
- Margin alone
FY2030 EBIT margin would need to reach 8.7% (model: 23.1%).
International Beverages Franchise
- Revenue alone
- FY2030 revenue would need to reach $1.2B (model: $6.4B).
- Margin alone
FY2030 EBIT margin would need to reach 11.0% (model: 39.4%).
Mechanical requirements, not forecasts. The separate sales-only and single-business factors are searched from 0.1× to 6×; an unsolved comparison means this business alone cannot get there within those bounds. Single-business revenue changes apply from FY2 onward; margin changes scale the full EBIT or EBITDA margin path. Mixed groups show revenue-weighted EBIT and EBITDA margins separately. Requirements above 100% are not feasible margins. Joint rows instead search non-negative uniform margin factors only up to the EBIT/EBITDA guardrails; the entire margin path scales, including post-FY2030 convergence. Sales and margins change together only in that table. The rate search runs from the largest terminal growth rate plus 0.5 percentage points to 30% WACC.
The discount rate
- Cost of equity
- 8.74%
- WACC
- 7.29%
- 10-year Treasury · model / spot
- 3.87% · 5.13%
r_f 3.87% (5-year average 10-year Treasury yield 3.87% (spot 5.13% on 2026-10-21)) + β 0.97 = 0.8 floor relevered for debt/equity 0.27 (§4.5 leverage rule) × 5%, rounded to 0.01% (1bp)
methodology §4.5: market-weighted WACC, not rounded
The model uses the recorded 5-year average Treasury yield. The spot yield is shown for context.
Every input, with its source
Show 41 inputs · reported, guidance and rule-based
| Input | Value | Basis | Why |
|---|---|---|---|
| Revenue FY2026PBNA | $29.6B | Reported | target (methodology §4.2), growth 5.0% pepsico.com ↗ |
| Revenue FY2030PBNA | $36.0B | Guidance | target (methodology §4.2), growth 5.0% pepsico.com ↗ |
| EBIT margin FY2030PBNA | 7.9% | Rule | linear path to 7.9% by FY2030 (§4.3 E2: 4.0000 points = 4pp × clamp((CAGR − 1.5%) / 2%, 0, 1); revenue CAGR 5.0% to FY2030; no cited expansion evidence) investors.pepsico.com ↗ |
| Maintenance capexPBNA | 4.7% | Reported | FY2025 capital spending 4.415B / revenue 93.925B, below 15%; FY2026 guide remains below 5%. investors.pepsico.com ↗ |
| Terminal growthPBNA | 2.0% | Rule | methodology §4.2 terminal growth for a mature line Valuation methodology §4.2 · Read methodology ↗ |
| Revenue FY2026PFNA | $27.5B | Reported | target (methodology §4.2), growth 0.0% pepsico.com ↗ |
| Revenue FY2030PFNA | $35.1B | Guidance | target (methodology §4.2), growth 6.3% pepsico.com ↗ |
| EBIT margin FY2030PFNA | 26.4% | Rule | linear path to 26.4% by FY2030 (§4.3 E2: 4.0000 points = 4pp × clamp((CAGR − 1.5%) / 2%, 0, 1); revenue CAGR 5.0% to FY2030; no cited expansion evidence) investors.pepsico.com ↗ |
| Maintenance capexPFNA | 4.7% | Reported | FY2025 capital spending 4.415B / revenue 93.925B, below 15%; FY2026 guide remains below 5%. investors.pepsico.com ↗ |
| Terminal growthPFNA | 2.0% | Rule | methodology §4.2 terminal growth for a mature line Valuation methodology §4.2 · Read methodology ↗ |
| Revenue FY2026EMEA | $19.5B | Reported | target (methodology §4.2), growth 8.0% pepsico.com ↗ |
| Revenue FY2030EMEA | $23.0B | Guidance | target (methodology §4.2), growth 4.3% pepsico.com ↗ |
| EBIT margin FY2030EMEA | 15.7% | Rule | linear path to 15.7% by FY2030 (§4.3 E2: 4.0000 points = 4pp × clamp((CAGR − 1.5%) / 2%, 0, 1); revenue CAGR 5.0% to FY2030; no cited expansion evidence) investors.pepsico.com ↗ |
| Maintenance capexEMEA | 4.7% | Reported | FY2025 capital spending 4.415B / revenue 93.925B, below 15%; FY2026 guide remains below 5%. investors.pepsico.com ↗ |
| Terminal growthEMEA | 2.0% | Rule | methodology §4.2 terminal growth for a mature line Valuation methodology §4.2 · Read methodology ↗ |
| Revenue FY2026Latin America Foods | $12.5B | Rule | target (methodology §4.2), growth 18.2% pepsico.com ↗ |
| Revenue FY2030Latin America Foods | $13.5B | Guidance | target (methodology §4.2), growth 1.9% pepsico.com ↗ |
| EBIT margin FY2030Latin America Foods | 23.1% | Rule | linear path to 23.1% by FY2030 (§4.3 E2: 4.0000 points = 4pp × clamp((CAGR − 1.5%) / 2%, 0, 1); revenue CAGR 5.0% to FY2030; no cited expansion evidence) investors.pepsico.com ↗ |
| Maintenance capexLatin America Foods | 4.7% | Reported | FY2025 capital spending 4.415B / revenue 93.925B, below 15%; FY2026 guide remains below 5%. investors.pepsico.com ↗ |
| Terminal growthLatin America Foods | 2.0% | Rule | methodology §4.2 terminal growth for a mature line Valuation methodology §4.2 · Read methodology ↗ |
| Revenue FY2026International Beverages Franchise | $5.4B | Reported | target (methodology §4.2), growth 8.0% pepsico.com ↗ |
| Revenue FY2030International Beverages Franchise | $6.4B | Guidance | target (methodology §4.2), growth 4.3% pepsico.com ↗ |
| EBIT margin FY2030International Beverages Franchise | 39.4% | Rule | linear path to 39.4% by FY2030 (§4.3 E2: 4.0000 points = 4pp × clamp((CAGR − 1.5%) / 2%, 0, 1); revenue CAGR 5.0% to FY2030; no cited expansion evidence) investors.pepsico.com ↗ |
| Maintenance capexInternational Beverages Franchise | 4.7% | Reported | FY2025 capital spending 4.415B / revenue 93.925B, below 15%; FY2026 guide remains below 5%. investors.pepsico.com ↗ |
| Terminal growthInternational Beverages Franchise | 2.0% | Rule | methodology §4.2 terminal growth for a mature line Valuation methodology §4.2 · Read methodology ↗ |
| Revenue FY2026Asia Pacific Foods | $5.1B | Reported | target (methodology §4.2), growth 10.0% pepsico.com ↗ |
| Revenue FY2030Asia Pacific Foods | $5.9B | Guidance | target (methodology §4.2), growth 3.8% pepsico.com ↗ |
| EBIT margin FY2030Asia Pacific Foods | 12.0% | Rule | linear path to 12.0% by FY2030 (§4.3 E2: 4.0000 points = 4pp × clamp((CAGR − 1.5%) / 2%, 0, 1); revenue CAGR 5.0% to FY2030; no cited expansion evidence) investors.pepsico.com ↗ |
| Maintenance capexAsia Pacific Foods | 4.7% | Reported | FY2025 capital spending 4.415B / revenue 93.925B, below 15%; FY2026 guide remains below 5%. investors.pepsico.com ↗ |
| Terminal growthAsia Pacific Foods | 2.0% | Rule | methodology §4.2 terminal growth for a mature line Valuation methodology §4.2 · Read methodology ↗ |
| Share of revenue FY2026Company costs | 2.2% | Rule | company costs outside segment profit, cash only: FY2025 reported segment profit 13.516B minus consolidated EBIT11.498B=2.018B annual corporate proxy / revenue 93.925B. Mixed mark-to-market and restructuring cannot be fully separated in this draft; retained conservative reported total, needs cash-cost reconciliation before decision-ready publication.; grows with the lines' revenue investors.pepsico.com ↗ |
| Share of revenue FY2034Company costs | 2.2% | Rule | company costs outside segment profit, cash only: FY2025 reported segment profit 13.516B minus consolidated EBIT11.498B=2.018B annual corporate proxy / revenue 93.925B. Mixed mark-to-market and restructuring cannot be fully separated in this draft; retained conservative reported total, needs cash-cost reconciliation before decision-ready publication.; grows with the lines' revenue investors.pepsico.com ↗ |
| WACCDiscount rates | 7.29% | Rule | methodology §4.5: market-weighted WACC, not rounded FRED DGS10 2021-10-20..2026-10-21 |
| Cost of equityDiscount rates | 8.74% | Rule | r_f 3.87% (5-year average 10-year Treasury yield 3.87% (spot 5.13% on 2026-10-21)) + β 0.97 = 0.8 floor relevered for debt/equity 0.27 (§4.5 leverage rule) × 5%, rounded to 0.01% (1bp) 60 monthly returns vs SPY, 2021-09..2026-09 (adjusted closes) |
| Tax rateDiscount rates | 21.0% | Guidance | Q3 updated FY2026 core annual taxabout 21%, supersedes prior 22%. investors.pepsico.com ↗ |
| Cash and short-term investmentsBalance sheet | $11.2B | Reported | cash, cash equivalents and short-term investments; use consolidated short-term investment total once, including all security classes sec.gov ↗ |
| BorrowingsBalance sheet | $51.9B | Reported | borrowings due within a year plus long-term borrowings us-gaap:ShortTermBorrowings · 0000077476-26-000048 + us-gaap:LongTermDebtAndCapitalLeaseObligations · 0000077476-26-000048 |
| Finance leasesBalance sheet | $0.0B | Reported | finance leases not separately tagged; retained inside combined debt, with no additional lease deduction balance sheet 2026-09-05 |
| Minority interestsBalance sheet | $0.2B | Reported | noncontrolling interests at book value us-gaap:MinorityInterest · 0000077476-26-000048 (filed 2026-10-08) |
| SharesBalance sheet | 1.363B | Reported | shares outstanding as of 2026-10-01 cover page of 10-Q 0000077476-26-000048 |
| Dividends per yearShareholders | $7.9B | Reported | Four paid quarters Jan/Mar 2026 1.4225 each plus Jun/Sep 2026 1.48 each=5.805.5.92 is forward annualized, not last-four paid. × 1.363B shares pepsico.com ↗ · pepsico.com ↗ |
Research notes
- share-count comparison: 1.367B quarter 2026-06-14..2026-09-05 · 0000077476-26-000048; point-in-time denominator retained
- unallocated company costs: $2.1B a year (2.1% of trailing revenue), growing with the lines, valued as one negative business
- cost of equity 8.74% (β 0.97 = 0.8 floor relevered for debt/equity 0.27 (§4.5 leverage rule)), WACC 7.3%
- §4.5 leverage: D/E 0.274, net debt/EBITDA 2.74, β_lev 0.973, β 0.800 → 0.973; D $51.88B, E $189.19B, cash $11.16B, base EBITDA $14.86B
Signal Ledger research under one stated scenario — management's targets are delivered — not a forecast that they will be and not investment advice. The research desk (GPT-6.1 (Codex)) gathers filings, guidance and targets; deterministic code applies the samepublished rules to every company and checks the result. Inputs may contain errors; follow the source links before relying on them. Read our valuation methodology →