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WEEKLY INVESTMENT OUTLOOK (16-12-2019)

EQ FUND

PEPSICO INC (PEP): BUY

Sector: Consumer Non-Durables          Industry: Non-Alcoholic Beverages

PepsiCo, Inc. is a global food and beverage company. The Company’s portfolio of brands includes Frito-Lay, Gatorade, Pepsi-Cola, Quaker and Tropicana. The Company operates through six segments: Frito-Lay North America (FLNA), Quaker Foods North America (QFNA), North America Beverages (NAB), Latin America, Europe Sub-Saharan Africa (ESSA), and Asia, Middle East and North Africa (AMENA). The FLNA segment includes its branded food and snack businesses in the United States and Canada. The QFNA segment includes its cereal, rice, pasta and other branded food businesses in the United States and Canada. The NAB segment includes its beverage businesses in the United States and Canada. The Latin America segment includes its beverage, food and snack businesses in Latin America. The ESSA segment includes its beverage, food and snack businesses in Europe and Sub-Saharan Africa. The AMENA segment includes its beverage, food and snack businesses in Asia, the Middle East and North Africa.

Trading Statistics

Market Capitalization: 132.348B

Shares Outstanding: 1.394B

Average Volume: 3.681B

Recommendation, why?

PepsiCo holds a dominant position in the global soft drinks market but apart from a robust beverage portfolio, PepsiCo’s snacking category remains sturdy. Notably, the company holds the number one position in the global snacks market with popular brands like Doritos, Cheetos and Lays. Just over half of PepsiCo’s sales come from snacks, while the remainder is contributed by beverages. PepsiCo’s snacking segment is likely to consistently deliver strong sales and profits, thanks to the increasing demand for savoury snacks.

Year to date, shares of this food and beverage company have surged 27.8% compared with the industry’s 16.8% rally.

DZC Capital Research Team

Author DZC Capital Research Team

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