Core Insights - PepsiCo's Beverages North America (PBNA) segment is a key component of its long-term growth strategy, achieving 2% organic revenue growth in Q3 2025 due to improved volume trends and strong brand performance [2][10] Performance Highlights - Trademark Pepsi experienced both volume and net revenue growth, with Pepsi Zero Sugar showing double-digit gains, supported by effective marketing initiatives [3][10] - The Mountain Dew brand also saw renewed momentum, with Baja Blast projected to exceed $1 billion in retail sales [3][10] Strategic Initiatives - The modern soda brand poppi is expanding rapidly, enhancing PepsiCo's position in functional and better-for-you beverages [4] - Management identified protein as a strategic growth platform, with brands like Muscle Milk and Propel contributing to innovation in performance and wellness [4] - The relaunch of Muscle Milk and new protein-enhanced Starbucks beverages aim to meet rising consumer demand for protein, particularly during morning consumption [4] Margin and Revenue Outlook - Although Q3 results faced tariff-related pressures, margins are rebounding in Q4, with expectations for continued margin expansion as cost pressures ease [5] - PBNA's revenue is projected to grow by 1% year-over-year in Q4 and 0.8% in 2025, driven by balanced contributions from volume growth and price realization [5][6] Competitive Landscape - PepsiCo competes with Coca-Cola and Monster Beverage, both of which are also focusing on innovation and growth in their respective beverage segments [7][8][9] - Coca-Cola is emphasizing brand-led growth and premiumization, while Monster Beverage is benefiting from strong demand in the energy drink market [8][9] Valuation and Earnings Estimates - PepsiCo shares have increased by 5.8% over the past six months, contrasting with a 1.4% decline in the industry [12] - The forward price-to-earnings ratio for PepsiCo is 16.62X, lower than the industry average of 17.84X [13] - The Zacks Consensus Estimate for PepsiCo's 2025 earnings per share (EPS) indicates a slight decline of 0.5%, while 2026 EPS is expected to grow by 5.4% [14]