{
  "schemaVersion": 1,
  "title": "PepsiCo at $125.97: Price/Volume Elasticity, Cash Conversion, GLP-1 Exposure, and Valuation Sensitivity",
  "description": "A source-backed PepsiCo (PEP) study measuring cash conversion, North American price and volume economics, GLP-1 exposure, acquisitions, leverage, and free-cash-flow valuation sensitivity.",
  "publishedAt": "2026-10-11",
  "dataAsOf": "2026-10-09",
  "researchPath": "/research/pepsico-price-volume-cash-conversion-valuation",
  "results": {
    "marketSnapshot": {
      "ticker": "PEP",
      "sharePriceUsd": 125.97,
      "priceAsOfDate": "2026-10-09",
      "sharesOutstanding": 1362741092,
      "sharesAsOfDate": "2026-10-01",
      "equityValueUsd": 171664495359.24
    },
    "balanceSheet": {
      "cashAndCashEquivalentsUsd": 10675000000,
      "shortTermInvestmentsUsd": 488000000,
      "shortTermDebtUsd": 9223000000,
      "longTermDebtUsd": 42658000000,
      "netDebtUsd": 40718000000,
      "asOfDate": "2026-09-05"
    },
    "historicalCashFlow": [
      {
        "fiscalYear": 2015,
        "revenueUsd": 63056000000,
        "operatingCashFlowUsd": 10580000000,
        "capitalSpendingUsd": 2758000000,
        "ppeSaleProceedsUsd": 86000000,
        "freeCashFlowUsd": 7908000000,
        "freeCashFlowMarginPct": 12.5412331895458,
        "capitalSpendingPctRevenue": 4.373889875666075
      },
      {
        "fiscalYear": 2023,
        "revenueUsd": 91471000000,
        "operatingCashFlowUsd": 13442000000,
        "capitalSpendingUsd": 5518000000,
        "ppeSaleProceedsUsd": 198000000,
        "freeCashFlowUsd": 8122000000,
        "freeCashFlowMarginPct": 8.879316941981612,
        "capitalSpendingPctRevenue": 6.032513036918805
      },
      {
        "fiscalYear": 2024,
        "revenueUsd": 91854000000,
        "operatingCashFlowUsd": 12507000000,
        "capitalSpendingUsd": 5318000000,
        "ppeSaleProceedsUsd": 342000000,
        "freeCashFlowUsd": 7531000000,
        "freeCashFlowMarginPct": 8.19888083262569,
        "capitalSpendingPctRevenue": 5.789622662050645
      },
      {
        "fiscalYear": 2025,
        "revenueUsd": 93925000000,
        "operatingCashFlowUsd": 12087000000,
        "capitalSpendingUsd": 4415000000,
        "ppeSaleProceedsUsd": 528000000,
        "freeCashFlowUsd": 8200000000,
        "freeCashFlowMarginPct": 8.730369976044717,
        "capitalSpendingPctRevenue": 4.70055895661432
      }
    ],
    "cashConversion": {
      "ytd2026": {
        "weeks": 36,
        "operatingCashFlowUsd": 7950000000,
        "capitalSpendingUsd": 2182000000,
        "ppeSaleProceedsUsd": 89000000,
        "freeCashFlowUsd": 5857000000
      },
      "ytd2025Comparison": {
        "weeks": 36,
        "operatingCashFlowUsd": 5468000000,
        "capitalSpendingUsd": 2499000000,
        "ppeSaleProceedsUsd": 272000000,
        "freeCashFlowUsd": 3241000000
      },
      "ytdFreeCashFlowGrowthPct": 80.71582844800986,
      "finalTcjaTransitionTaxPaymentUsd": 965000000,
      "fy2026FcfConversionGuidanceMinimumPct": 80,
      "fy2026CapitalSpendingGuidanceMaximumPctRevenue": 5,
      "fy2027FcfConversionGoalPct": 90,
      "fy2027FcfConversionGoalDirection": "greater-than",
      "historicalHighInvestmentPeriod": "Management described capital spending at roughly 6% of revenue from 2019 through 2024 before falling below 5% in 2025."
    },
    "businessQuality": {
      "fy2025CoreNetRoicPct": 19.1,
      "fy2025RevenueOutsideUnitedStatesPct": 44
    },
    "northAmerica": {
      "pfnaQ3_2026": {
        "period": "12 weeks ended 2026-09-05",
        "savorySnackVolumeGrowthPct": 1,
        "operatingProfitGrowthPct": -13,
        "netRevenueDirection": "decreased slightly",
        "unitVolumeDirection": "grew slightly"
      },
      "pfnaYtd2026": {
        "period": "36 weeks ended 2026-09-05",
        "unitVolumeGrowthPct": 1,
        "operatingProfitGrowthPct": -8,
        "netRevenueDirection": "decreased slightly"
      },
      "pbnaQ3_2026": {
        "period": "12 weeks ended 2026-09-05",
        "netRevenueGrowthPct": 5,
        "unitVolumeGrowthPct": -2,
        "noncarbonatedVolumeGrowthPct": -3,
        "carbonatedSoftDrinkVolumeGrowthPct": -2
      },
      "pbnaYtd2026": {
        "period": "36 weeks ended 2026-09-05",
        "netRevenueGrowthPct": 7,
        "unitVolumeGrowthPct": -3,
        "noncarbonatedVolumeGrowthPct": -3,
        "carbonatedSoftDrinkVolumeGrowthPct": -2.5
      },
      "cocaColaNorthAmericaQ2_2026": {
        "period": "quarter ended 2026 Q2",
        "unitCaseVolumeGrowthPct": 3,
        "priceMixGrowthPct": 3,
        "organicRevenueGrowthPct": 9,
        "comparisonBoundary": "Different company economics and a different 2026 quarter; useful as directional category/competitive context, not a matched peer control."
      }
    },
    "internationalVolumeSignals": [
      {
        "label": "International Beverage Franchise",
        "period": "Q3 2026",
        "unitVolumeGrowthPct": 5
      },
      {
        "label": "EMEA beverages",
        "period": "Q3 2026",
        "unitVolumeGrowthPct": 4
      },
      {
        "label": "Latin America Foods",
        "period": "Q3 2026",
        "unitVolumeGrowthPct": 3
      },
      {
        "label": "Asia Pacific Foods",
        "period": "Q3 2026",
        "unitVolumeGrowthPct": 11
      }
    ],
    "glp1Evidence": {
      "pwcCurrentUserHouseholdSharePct": 21,
      "pwcComparisonHouseholdSharePct": 9,
      "pwcComparisonDate": "2025-01",
      "pwcObservationDate": "2026-05",
      "pwcUserHouseholdGrocerySpendChangePct": -5.5,
      "cornellSavorySnackSpendChangeApproxPct": -10,
      "boundary": "These external household studies measure spending behavior around GLP-1 use. They do not isolate a PepsiCo-specific revenue effect or establish that GLP-1 adoption caused PepsiCo's recent segment results."
    },
    "capitalAllocation": {
      "fy2025AcquisitionsInvestmentsPurchasedIntangiblesUsd": 3391000000,
      "poppiCashConsiderationUsd": 1950000000,
      "poppiContingentConsiderationFairValueUsd": 200000000,
      "sieteCashConsiderationUsd": 1200000000,
      "fy2025ImpairmentAndOtherChargesUsd": 1946000000,
      "sodastream2023ImpairmentUsd": 862000000,
      "productivityPlanExpectedPretaxChargesUsd": 6150000000,
      "productivityPlanExpectedCashExpendituresUsd": 5100000000,
      "productivityPlanCashSpentThroughQ3_2026Usd": 3100000000,
      "productivityPlanEndYear": 2030
    },
    "ownerCashFlowNormalization": {
      "illustrativeNormalizedReportedFcfUsd": 10700000000,
      "illustrativeAcquisitionReserveUsd": 750000000,
      "illustrativeOwnerCashFlowUsd": 9950000000,
      "boundary": "The normalized FCF level and acquisition reserve are analytical assumptions, not PepsiCo guidance. Reported free cash flow already includes restructuring cash costs but excludes acquisition consideration."
    },
    "valuation": {
      "scenarioCases": [
        {
          "id": "lower",
          "label": "Lower cash-flow case",
          "startingOwnerCashFlowUsd": 8500000000,
          "growthRatePct": 1,
          "discountRatePct": 10,
          "terminalGrowthRatePct": 2,
          "forecastYears": 10,
          "explicitPeriodPresentValueUsd": 54764702484.123276,
          "terminalPresentValueUsd": 46154706831.1569,
          "modeledEquityValueUsd": 100919409315.28018,
          "modeledShareValueUsd": 74.05618712734919,
          "terminalValueSharePct": 45.73422213259886
        },
        {
          "id": "central",
          "label": "Central cash-flow case",
          "startingOwnerCashFlowUsd": 9950000000,
          "growthRatePct": 3.5,
          "discountRatePct": 9,
          "terminalGrowthRatePct": 2.5,
          "forecastYears": 10,
          "explicitPeriodPresentValueUsd": 75673008841.3983,
          "terminalPresentValueUsd": 93491495749.77568,
          "modeledEquityValueUsd": 169164504591.17398,
          "modeledShareValueUsd": 124.13546900747158,
          "terminalValueSharePct": 55.266615165941566
        },
        {
          "id": "higher",
          "label": "Higher cash-flow case",
          "startingOwnerCashFlowUsd": 10800000000,
          "growthRatePct": 5,
          "discountRatePct": 8.5,
          "terminalGrowthRatePct": 2.5,
          "forecastYears": 10,
          "explicitPeriodPresentValueUsd": 90578627117.97618,
          "terminalPresentValueUsd": 132920504002.26363,
          "modeledEquityValueUsd": 223499131120.2398,
          "modeledShareValueUsd": 164.00703877816272,
          "terminalValueSharePct": 59.47249250412254
        }
      ],
      "reverseDcf": {
        "targetEquityValueUsd": 171664495359.24,
        "startingOwnerCashFlowUsd": 9950000000,
        "forecastYears": 10,
        "terminalGrowthRatePct": 2.5,
        "cases": [
          {
            "discountRatePct": 8,
            "terminalGrowthRatePct": 2.5,
            "startingOwnerCashFlowUsd": 9950000000,
            "impliedGrowthRatePct": 1.509970121814319
          },
          {
            "discountRatePct": 8.5,
            "terminalGrowthRatePct": 2.5,
            "startingOwnerCashFlowUsd": 9950000000,
            "impliedGrowthRatePct": 2.6288853435913255
          },
          {
            "discountRatePct": 9,
            "terminalGrowthRatePct": 2.5,
            "startingOwnerCashFlowUsd": 9950000000,
            "impliedGrowthRatePct": 3.6947018315095166
          },
          {
            "discountRatePct": 9.5,
            "terminalGrowthRatePct": 2.5,
            "startingOwnerCashFlowUsd": 9950000000,
            "impliedGrowthRatePct": 4.715439445244963
          },
          {
            "discountRatePct": 10,
            "terminalGrowthRatePct": 2.5,
            "startingOwnerCashFlowUsd": 9950000000,
            "impliedGrowthRatePct": 5.697463326428165
          }
        ]
      },
      "sensitivity": {
        "startingOwnerCashFlowUsd": 9950000000,
        "forecastYears": 10,
        "terminalGrowthRatePct": 2.5,
        "growthRatesPct": [1, 2, 3, 4, 5],
        "discountRatesPct": [8, 8.5, 9, 9.5, 10],
        "shareValueMatrix": [
          {
            "discountRatePct": 8,
            "values": [
              { "growthRatePct": 1, "modeledShareValueUsd": 121.0691948248338 },
              { "growthRatePct": 2, "modeledShareValueUsd": 130.87093987462535 },
              { "growthRatePct": 3, "modeledShareValueUsd": 141.4851387062163 },
              { "growthRatePct": 4, "modeledShareValueUsd": 152.97435491112392 },
              { "growthRatePct": 5, "modeledShareValueUsd": 165.40541733340865 }
            ]
          },
          {
            "discountRatePct": 8.5,
            "values": [
              { "growthRatePct": 1, "modeledShareValueUsd": 111.22766471802869 },
              { "growthRatePct": 2, "modeledShareValueUsd": 120.05258229410713 },
              { "growthRatePct": 3, "modeledShareValueUsd": 129.60182598189925 },
              { "growthRatePct": 4, "modeledShareValueUsd": 139.93089895760968 },
              { "growthRatePct": 5, "modeledShareValueUsd": 151.09907739284435 }
            ]
          },
          {
            "discountRatePct": 9,
            "values": [
              { "growthRatePct": 1, "modeledShareValueUsd": 102.89299408647072 },
              { "growthRatePct": 2, "modeledShareValueUsd": 110.8960146035127 },
              { "growthRatePct": 3, "modeledShareValueUsd": 119.54946411725756 },
              { "growthRatePct": 4, "modeledShareValueUsd": 128.90293725614188 },
              { "growthRatePct": 5, "modeledShareValueUsd": 139.0093902235252 }
            ]
          },
          {
            "discountRatePct": 9.5,
            "values": [
              { "growthRatePct": 1, "modeledShareValueUsd": 95.74254795726188 },
              { "growthRatePct": 2, "modeledShareValueUsd": 103.04523325140715 },
              { "growthRatePct": 3, "modeledShareValueUsd": 110.9356053297466 },
              { "growthRatePct": 4, "modeledShareValueUsd": 119.4582526282229 },
              { "growthRatePct": 5, "modeledShareValueUsd": 128.66077703630793 }
            ]
          },
          {
            "discountRatePct": 10,
            "values": [
              { "growthRatePct": 1, "modeledShareValueUsd": 89.53971613634373 },
              { "growthRatePct": 2, "modeledShareValueUsd": 96.23916494218322 },
              { "growthRatePct": 3, "modeledShareValueUsd": 103.47245890985104 },
              { "growthRatePct": 4, "modeledShareValueUsd": 111.27989978539183 },
              { "growthRatePct": 5, "modeledShareValueUsd": 119.70450509528031 }
            ]
          }
        ]
      }
    },
    "methodology": {
      "freeCashFlowDefinition": "PepsiCo-defined free cash flow: net cash from operating activities less capital spending plus sales of property, plant and equipment.",
      "ownerCashFlowDefinition": "Illustrative owner cash flow subtracts an analytical long-run acquisition reserve from normalized reported free cash flow.",
      "dcfDefinition": "Equity free-cash-flow DCF. Because the cash-flow measure is after interest, debt is not subtracted a second time from modeled equity value.",
      "ratingBoundary": "The study does not issue an investment rating, assign probabilities to scenarios, or present any modeled value as a price target."
    }
  },
  "sourceIds": [
    "pep-2026-q3-10q",
    "pep-2026-q3-release",
    "pep-2025-10k",
    "pep-2015-10k",
    "pep-2026-cagny",
    "pep-affordability-2026",
    "pep-market-price-2026-10-09",
    "coke-2026-q2",
    "cornell-glp1-food-spend",
    "pwc-glp1-2026"
  ],
  "notes": [
    "Modeled share values are scenario outputs, not price targets or investment ratings.",
    "The $10.7B normalized reported FCF and $750M acquisition reserve are analytical assumptions, not PepsiCo guidance.",
    "Third-party source data are summarized only to the extent needed to reproduce the published analysis."
  ]
}