PepsiCo's Rally Looks Convincing, But The 15% Bet Adds Risk (Rating Downgrade)

Group 1 - PepsiCo (PEP) has faced challenges in the current bull market, with concerns over domestic volume weakness and potential limits to its pricing power [1] - The company has shown sustained profitability through strong margins, stable and expanding free cash flow, and high returns on invested capital, which are considered more reliable drivers of returns than valuation alone [1] - The analyst emphasizes a long-term investment approach focused on undervalued growth stocks and high-quality dividend growers in the U.S. and European equities [1]