Is PepsiCo Stock a Buy, Sell, or Hold in 2025?

Core Viewpoint - PepsiCo's stock has declined approximately 15% over the past year, attributed to muted guidance and economic uncertainties [1] Financial Performance - In 2024, PepsiCo achieved a 2% increase in organic revenue and a record core EPS of $8.16, reflecting solid financial trends [3] - The company is guiding for low-single-digit organic revenue growth and mid-single-digit core EPS growth for 2025 [5] Market Position and Valuation - PepsiCo's stock is currently trading at its lowest valuation in five years, with a forward P/E ratio of 18, significantly below its average of 26 since 2020, indicating potential undervaluation [6] - The quarterly dividend payment of $1.36 per share yields 3.6%, the highest in a decade, supported by strong free cash flow [7] Geographic Diversification - Operations in Europe and Latin America have been growth drivers, balancing mixed results from North America [3] - Geographic diversification is crucial in the current market environment, especially with potential tariff disruptions [4] Consumer Trends and Challenges - There is a shift in consumer habits towards healthier and more affordable food options, which may impact demand for PepsiCo products [9] - The company has faced challenges with soft unit volume trends in its Frito-Lay and Quaker Foods divisions in North America [9][10] Investment Outlook - The current year is pivotal for PepsiCo to reaffirm its market potential and improve investor sentiment, presenting a buy-the-dip opportunity [11]