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The Screen · Consumer Defensive · Beverages - Non-Alcoholic
PepsiCo
PEP · a US exchange · USD · Market cap $189.1B · 306,000 employees
PepsiCo, Inc.
FAIL · Does not pass the screen
138.45 USD
At the last full screen 2026-09-08
Screened 2026-09-08 · the tape above runs as of 23:00 UTC · two dates, stated on purpose · verdict and workings shown in full · never trimmed
The Label · The Season, Not the Day
This name holds its markdown label.
PepsiCo holds its Markdown at $138.45. Consolidating, no directional conviction, held for 1 days.
As held on the ledger · 2026-09-08
Phase
Markdown · caution
Quantitative state
Consolidating, no directional conviction, held for 1 days
Price at the screen
$138.45
Valuation
18.17 trailing · 15.43 forward price to earnings
Values screen
FAIL· score 10.0
Beta
0.36
The Workings
Five Screens, Shown in Full
Does not pass. Debt ratio
Test
Figure
Limit
What it means
Status
Business activity
Permissible
Core business clean
Its core business isn't built on prohibited lines: no gambling, alcohol, tobacco, weapons, or interest-based lending.
Pass
Debt load
46.46%
Below 33%
Interest-bearing debt is 46.5% of its assets, above the one-third ceiling the screen allows.
Fail
Interest-bearing cash
4.25%
Below 33%
Cash held in interest-bearing accounts and securities is 4.2% of assets, under the one-third limit.
Pass
Receivables
17.15%
Below 49%
Money owed to the company is 17.2% of assets, under the 49% limit.
Pass
Revenue purity
0.00%
Below 5%
Only 0.0% of revenue comes from non-compliant sources, under the 5% line.
Pass
Five checks adapted from AAOIFI screening standards: business activity plus four balance-sheet ratios. All five must pass for ethical clearance. Every figure is arithmetic on public accounts, not judgement.
What the Numbers Say It Is Worth
The Fair Value Range
Our framework reads AVOID: it trades at roughly a 21% discount to our $167.25 fair value, narrow competitive moat, 6.40% revenue growth.
Fair value range in USD, drawn from the 2026-09-08 screen. The gold marker is the market price at the same screen. A 20.8% margin of safety to the base estimate.
Third-party analyst targets: 22 covering, consensus Hold. The average target sits +12% from the screen price.
Reading the gap · Both our model and the analysts see meaningful upside from here.
Price History & Projections
Where it has been, where the models see it going. History from market close data; projection points are our fair-value estimates and third-party analyst targets, dated to the 2026-09-08 screen.
Fair value and rating are our own model estimates; the Street's range reflects third-party analyst estimates. Analysis, not advice.
The Business, in Plain Words
The Soda Giant With A Troubled Bubble
Think about every time you grab a Pepsi or a bag of Doritos from your local store - all of these sales add up, and PepsiCo has the market dominance to make it a recurring revenue machine, right? This is a business with decent revenue growth at 6% and an impressive 52% return on equity, which should make it a star performer. Yet, the market has it trading at a forward price-to-earnings ratio of 15.8x, which, on the surface, seems like a bargain. But there's a catch.
Our fair value of $167.28 suggests there's an 18% margin of safety, which sounds appealing, but the ethical screen has failed PepsiCo on its debt ratio. High debt can be a drag on a company's performance, especially in uncertain economic times. Combine that with a narrow moat, indicating limited competitive advantage, and you have a recipe for potential trouble.
Risk here is twofold - the debt load is high enough to warrant caution, and the ethical failing is a non-starter for us. While the numbers might look tempting, the underlying issues give us pause. It's like buying a house with a great view, only to find out the foundation is crumbling. Analysis, not advice.
The risks · The things to watch: it carries a real debt load, which raises the stakes if revenue slips.
Plain-English interpretation of our own screen data. Analysis, not advice.
Where & How to Trade
PEP trades on a US exchange. As a listed security it is accessible through almost any international broker offering its home market. New to this, or investing from abroad? Our guide to accessing global markets covers brokers, currencies and the practical steps.
The framework has shifted from distribution to accumulation since the last review. Smart money appears to be quietly building positions. This typically precedes a markup phase. Price has moved down 0.2% since our last review. Ethical screening: FAIL. This security does not pass our values-based screening criteria. The risk-adjusted return profile shows negative risk-adjusted returns. Our composite framework grades it C, carrying a low risk profile. Technically it is holding around 2% above its long-term trend line with momentum reading bearish. Over the past year the shares are up 14%. Our forward projection puts the odds of a 10% gain over the next month near 8%. The street (21 analysts) rates it hold, with a mean price target of $171.
2026-08-08Distribution$138.78-2.2%Entry 4
The framework reads distribution. Smart money appears to be selling into strength. Institutional holders may be rotating out. Price has moved down 2.2% since our last review. Ethical screening: FAIL. This security does not pass our values-based screening criteria. The risk-adjusted return profile shows negative risk-adjusted returns. Our composite framework grades it C, carrying a low risk profile. Technically it is holding around 2% above its long-term trend line with momentum reading bearish. Over the past year the shares are up 14%. Our forward projection puts the odds of a 10% gain over the next month near 8%. The street (21 analysts) rates it hold, with a mean price target of $171.
2026-07-18Distribution$141.92+0.0%Entry 3
The framework reads distribution. Smart money appears to be selling into strength. Institutional holders may be rotating out. Price has moved down 0.0% since our last review. Ethical screening: FAIL. This security does not pass our values-based screening criteria. The risk-adjusted return profile shows negative risk-adjusted returns. Our composite framework grades it C, carrying a low risk profile. Technically it is holding around 2% above its long-term trend line with momentum reading bearish. Over the past year the shares are up 14%. Our forward projection puts the odds of a 10% gain over the next month near 8%. The street (21 analysts) rates it hold, with a mean price target of $171.
2026-07-03Distribution$141.92+0.0%Entry 2
The framework reads distribution. Smart money appears to be selling into strength. Institutional holders may be rotating out. Price has moved down 0.0% since our last review. Ethical screening: FAIL. This security does not pass our values-based screening criteria. The risk-adjusted return profile shows negative risk-adjusted returns.
2026-07-02Distribution$141.92Entry 1
The framework reads distribution. Smart money appears to be selling into strength. Institutional holders may be rotating out. Ethical screening: FAIL. This security does not pass our values-based screening criteria. The risk-adjusted return profile shows negative risk-adjusted returns.
Each entry above was written on its date, before the outcome. A journal you can prune is not a journal.
