3) PepsiCo, Inc. (NYSE:PEP)
Bridgewater Associates’ Stake Value: $307,622,818
Number of Hedge Fund Holders: 65
Forward P/E Ratio as of 4 October: 19.23x
PepsiCo, Inc. (NYSE:PEP) is engaged in the manufacturing, marketing, distributing, and selling of various beverages and convenient foods worldwide.
Market experts believe that the recovery of the Quaker supply chain, strong international growth, and targeted consumer value tactics should continue to act as principal growth drivers for PepsiCo, Inc. (NYSE:PEP). In the recent earnings call, the company’s management highlighted the healthy performance of the Gatorade and Mountain Dew brands and the growth of the Zero portfolio. PepsiCo, Inc. (NYSE:PEP) continues to focus on value-oriented strategies to meet consumer demand. Moreover, Frito-Lay North America is expected to address the value gap through promotions and interventions.
PepsiCo, Inc. (NYSE:PEP) targets achieving short-term growth in Q3 2024 and Q4 2024 by implementing various strategies and anticipates that the majority of growth in H2 2024 will come from North America. Also, investments in marketing, execution, and availability should continue to drive category growth. PepsiCo, Inc. (NYSE:PEP)’s international beverage business is expected to be a growth engine in the near term. Wall Street analysts remain optimistic about Europe’s resilience and performance and India’s significant growth space.
PepsiCo, Inc. (NYSE:PEP) focuses on deploying resources to reignite growth and cater to consumer needs in a segmented and data-driven way. The company has entered into a definitive agreement to acquire Garza Food Ventures LLC, dba Siete Foods. Wall Street believes that the acquisition will complement PepsiCo, Inc. (NYSE:PEP)’s portfolio with the addition of an authentic, Mexican-American brand, while also growing its better-for-you food offerings.
JPMorgan Chase & Co. upped its price objective on the shares of the company from $182.00 to $185.00, giving a “Neutral” rating on 1st October.
Artisan Partners, an investment management company, released its first quarter 2024 investor letter. Here is what the fund has to say about the company:
“In the demographics/consumer trends theme, slowing sales volumes led us to focus more on services versus goods. As an example, we sold our position in food and beverage leader PepsiCo, Inc. (NASDAQ:PEP) given slowing growth in its underperforming core beverage business, one which generates about 60% of revenues. Adding to the uncertainty of growth prospects beverages, PepsiCo was forced by local lawmakers and industry wholesalers to shift to a new distribution model during the rollout of Hard Mtn Dew, a new line of drinks that combines Mountain Dew with malt liquor. We also exited our position in Wal-Mart de Mexico as the company regroups after Hurricane Otis devastated parts of Mexico’s west coast last fall. The damages will likely affect earnings over the medium term. We also sold consumer food and beverage giant Nestle due to slowing sales volume growth. Food inflation over the last two years has increased consumer price sensitivity, putting pressure on many in the industry. In contrast to these goods providers, we bought shares of TUI, an online travel agency that provides custom travel experiences via dynamically priced services such as airfare, lodging and local activities on one platform. We believe the addition of Ryanair to the platform, Europe’s largest airline, will strengthen TUI’s service offering at a time when travel spending is predicted to remain elevated at least through the summer.”
