DCF Tool

PEP

PepsiCo Inc – Soft Drink Manufacturing
PepsiCo products are enjoyed by consumers more than one billion times a day in more than 200 countries and territories around the world. PepsiCo generated more than $67 billion in net revenue in 2019, driven by a complementary food and beverage portfolio that includes Frito-Lay, Gatorade, Pepsi-Cola, Quaker and Tropicana. PepsiCo's product portfolio includes a wide range of enjoyable foods and beverages, including 23 brands that generate more than $1 billion each in estimated annual retail sales. Guiding PepsiCo is our vision to Be the Global Leader in Convenient Foods and Beverages by Winning with Purpose. "Winning with Purpose" reflects our ambition to win sustainably in the marketplace and embed purpose into all aspects of the business
Analysis Results
Intrinsic Value $166.51
Latest Price $162.21
Relative Value 3% undervalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 3.5%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 5.2%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 3.5%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2022 7.66 7.28
2023 7.93 7.17
2024 8.21 7.05
2025 8.5 6.94
2026 8.8 6.84
Terminal Value

Assuming the company was sold after the projection period at an exit multiple of 30, the terminal value of the company would be 264 billion. This corresponds to a present value of 195 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 35.3 billion. Adding in the terminal value gives a total present value of 230 billion.

There are presently 1.38 billion outstanding shares, so the intrinsic value per share is 166.51.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 43,566,000,000
Current Cash 11,976,000,000
Current Liabilities 52,440,000,000
Current Debt 8,616,000,000
Non-Cash Working Capital (NCWC) -12,234,000,000
Change in NCWC -7,272,000,000
EBIT 22,324,000,000
Tax Provision 4,284,000,000
Depreciation and Amortization 6,430,000,000
Capital Expenditure -9,250,000,000
Unlevered Free Cash Flow 7,363,044,903
Current Assets 24,060,000,000
Current Cash 9,705,000,000
Current Liabilities 26,009,000,000
Current Debt 6,692,000,000
Non-Cash Working Capital (NCWC) -4,962,000,000
Change in NCWC 1,180,000,000
EBIT 9,953,000,000
Tax Provision 1,826,000,000
Depreciation and Amortization 2,339,000,000
Capital Expenditure -3,132,000,000
Unlevered Free Cash Flow 8,302,536,098
Current Assets 17,645,000,000
Current Cash 5,738,000,000
Current Liabilities 20,461,000,000
Current Debt 2,920,000,000
Non-Cash Working Capital (NCWC) -5,634,000,000
Change in NCWC -422,000,000
EBIT 10,291,000,000
Tax Provision 1,959,000,000
Depreciation and Amortization 2,432,000,000
Capital Expenditure -4,232,000,000
Unlevered Free Cash Flow 5,904,044,136
Current Assets 21,893,000,000
Current Cash 8,993,000,000
Current Liabilities 22,138,000,000
Current Debt 4,026,000,000
Non-Cash Working Capital (NCWC) -5,212,000,000
Change in NCWC -1,712,000,000
EBIT 10,110,000,000
Tax Provision -3,370,000,000
Depreciation and Amortization 2,399,000,000
Capital Expenditure -3,282,000,000
Unlevered Free Cash Flow 7,515,000,000
Current Assets 31,027,000,000
Current Cash 19,510,000,000
Current Liabilities 20,502,000,000
Current Debt 5,485,000,000
Non-Cash Working Capital (NCWC) -3,500,000,000
Change in NCWC -221,000,000
EBIT 10,509,000,000
Tax Provision 4,694,000,000
Depreciation and Amortization 2,369,000,000
Capital Expenditure -2,969,000,000
Unlevered Free Cash Flow 4,550,607,165
Current Assets 27,089,000,000
Current Cash 16,125,000,000
Current Liabilities 21,135,000,000
Current Debt 6,892,000,000
Non-Cash Working Capital (NCWC) -3,279,000,000
Change in NCWC -794,000,000
EBIT 9,785,000,000
Tax Provision 2,174,000,000
Depreciation and Amortization 2,368,000,000
Capital Expenditure -3,040,000,000
Unlevered Free Cash Flow 5,831,850,461
Current Assets 23,031,000,000
Current Cash 12,009,000,000
Current Liabilities 17,578,000,000
Current Debt 4,071,000,000
Non-Cash Working Capital (NCWC) -2,485,000,000
Change in NCWC -1,406,000,000
EBIT 9,712,000,000
Tax Provision 1,941,000,000
Depreciation and Amortization 2,416,000,000
Capital Expenditure -2,758,000,000
Unlevered Free Cash Flow 5,430,945,444
Current Assets 20,663,000,000
Current Cash 8,726,000,000
Current Liabilities 18,092,000,000
Current Debt 5,076,000,000
Non-Cash Working Capital (NCWC) -1,079,000,000
Change in NCWC -1,071,000,000
EBIT 9,581,000,000
Tax Provision 2,199,000,000
Depreciation and Amortization 2,625,000,000
Capital Expenditure -2,859,000,000
Unlevered Free Cash Flow 5,870,082,562
Current Assets 22,203,000,000
Current Cash 9,678,000,000
Current Liabilities 17,839,000,000
Current Debt 5,306,000,000
Non-Cash Working Capital (NCWC) -8,000,000
Change in NCWC 165,000,000
EBIT 9,705,000,000
Tax Provision 2,104,000,000
Depreciation and Amortization 2,663,000,000
Capital Expenditure -2,795,000,000
Unlevered Free Cash Flow 7,441,371,949
Current Assets 18,720,000,000
Current Cash 6,619,000,000
Current Liabilities 17,089,000,000
Current Debt 4,815,000,000
Non-Cash Working Capital (NCWC) -173,000,000
Change in NCWC -1,240,000,000
EBIT 9,112,000,000
Tax Provision 2,090,000,000
Depreciation and Amortization 2,689,000,000
Capital Expenditure -2,714,000,000
Unlevered Free Cash Flow 5,553,637,764

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