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Billionaire Paul Singer’s 10 Best Stock Picks. Pepsico (NASDAQ:PEP) is ranked No. 8 (see Billionaire Paul Singer’s Top 5 Stock Picks).
Elliott stake: $197,994,750
Pepsico’s (NASDAQ:PEP) recent quarterly results showed that its turnaround plan is working. The company delivered a strong quarter with revenue and EPS exceeding expectations, supported by organic growth and margin expansion. International markets helped offset earlier weakness in North America, where volumes are now beginning to stabilize and recover.
The stock trades at about 18 times forward earnings, which is relatively reasonable for a defensive consumer name. It has a 3.5% dividend yield and a history of increasing dividends for over 50 years.
Pepsico Inc (NASDAQ:PEP) is protecting itself from the global decline in sugary soft drinks by pivoting toward functional hydration and clean labels. Through brands like Bubly, which offers unsweetened sparkling water, and Propel, a sugar-free electrolyte water, Pepsico Inc (NASDAQ:PEP) is tapping into health-conscious consumers who are ditching traditional carbonated beverages. Its strategic participation and distribution agreement with Celsius ensures a dominant position in the market targeting fitness-oriented demographics.
The company expects organic revenue growth in the range of 2% to 4% for the full year, while core EPS in constant currency is forecast to rise between 4% and 6%. The organic revenue and EPS guidance midpoints were above consensus expectations.
Fundsmith Equity Fund stated the following regarding PepsiCo, Inc. (NASDAQ:PEP) in its Q4 2025 investor letter:
“It seems to us that Brown-Forman and PepsiCo, Inc.’s (NASDAQ:PEP) snack business is squarely in the crosshairs of the impact of appetite reduction due to weight-loss drugs. Whether our investment in Novo Nordisk ultimately proves a good thing or not, we believe weight-loss drugs and their impact are here to stay. Additionally, the alcoholic beverage business faces headwinds due to the impact of the (lack of) drinking habits of Generation Z and cannabis legalizationClick here to read the letter in detail).”
While we recognize the potential of PEP as an investment, we believe certain AI stocks offer greater growth potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that’s also benefiting significantly from Trump-era tariffs and the offshoring trend, check out our free report on best short-term AI stock.
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