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PepsiCo, Inc. (PEP) · Q3 2026 results and valuation
Share price: $143.94 · 2026-11-11
PepsiCo, Inc. is a beverage and convenient food company that manufactures, markets, and distributes a variety of products including snacks, cereals, and soft drinks. The company serves consumers and retailers in more than 200 countries and territories through its own operations and a network of bottlers and distributors. Source: 10-K annual report (2026-02-03)
Results Q3 2026 vs Q2 2026 · previous quarter · published 8 Oct 2026 and 9 Jul 2026
Net income up 2.2% on the previous quarter. Management sounded cautious, in its script and in answers to analysts.
1 · Numbers
+2.2%
Net income vs Q2 2026
Outlook given
Net income 3.05B vs 2.98B
Revenue +4.5%
Why Against the same quarter last year (+17.1%), net income rose because organic revenue increased 8%, operating margin expanded 105 basis points, and global beverage and food volumes increased by 3% and 1% respectively.
2 · How management spoke
Cautious
Among the least upbeat of all company calls
Answers to analysts: typical, in line with the script.
Similar to last call.
3 · What stood out
PepsiCo views 100-calorie and 120-calorie packs as critical for the future because that business is already over $3 billion.
Valuation
Is PepsiCo, Inc. undervalued?
Reverse DCF. Free cash flow from the last full fiscal year (2025-12-27), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At 2.8% growth a year (3-year revenue growth), the model's fair value is $37.87 a share — the stock trades 280% above it. Today's price assumes 14.5% growth a year.
Current price
$143.94
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+14.5% for 10 yrs
Fair value / share
$37.87
Buy below
$28.40
Price vs fair value
Overvalued >200%
Price vs buy-below price
Overvalued >200%
Read between the lines
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Figure
Organic revenue accelerated to 3.1%, reported revenue rose over 5%, core operating profit increased 3%, and EPS increased 2%.
Source quote
“Organic revenue accelerated to 3.1%. Reported revenue was north of 5%. Core operating profit increased 3%, and EPS increased 2%.”
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Figure
Organic revenue increased 8% and operating margin expanded 105 basis points, contributing to improved profitability in the third quarter.
Source quote
“Organic revenue increased 8%, operating margin expanded 105 basis points.”
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Guidance
Margin performance was below what the company expected for the quarter, representing the largest change in their prepared remarks.
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Figure
The company views 100-calorie and 120-calorie packs as critical for the future because that business is already $3 billion+.
Source quote
“We think that 100-calorie packs, 120-calorie packs, that is critical for the future. That business is already $3 billion+.”
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Key theme
The company will implement net revenue management tactics to impact pricing and product mix to influence overall revenue.
Source quote
“We're going to see a mix of net revenue management tactics that will impact some pricing, but also mix and all the decisions that we can make around that.”
1 more
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Figure
The company is setting pricing guardrails to keep products below $25 to ensure affordability in most take-home parts of the business next year.
Source quote
“We're putting some guardrails to our people, making sure that next year's pricing is going to be below $25, so we continue to be very affordable in most of the take-home parts of the business.”
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q3 2026. Ring: Q2 2026.
Script and answers carried a similar tone, so the script's message held up under questioning.
Sentences that drove the tone
“Make sure that with a sense of urgency, we pivot those resources towards growth and making sure that we're affordable, that we capture the opportunities for net revenue management and...”
“On the contrary, we're trying to invest more in growth across the world, international and the U.S., to make sure that we continue the sequential improvement or acceleration of the...”
“We're looking at any other opportunities to improve our execution, because I think there's also an element of execution that can improve.”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-09-05)
| Metric | Q3 2026period end 2026-09-05 | Q2 2026period end 2026-06-13 | Change | Q3 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 25.27B | 24.18B | +4.5% | 23.94B | +5.6% |
| Gross profit | 13.75B | 13.11B | +4.9% | 12.82B | +7.3% |
| Operating income | 4.26B | 4.02B | +5.9% | 3.57B | +19.4% |
| Net income | 3.05B | 2.98B | +2.2% | 2.60B | +17.1% |
| EPS | 2.23 | 2.18 | +2.3% | 1.90 | +17.4% |
| P/E today 17.8 | 17.3 | 18.9 | −1.6 | 27.8 | −10.5 |
Topics
Most discussed now
- New On the contrary, PepsiCo is trying to invest more in growth across the world, international and the U.S., to make sure...
Faded since Q2 2026
- Dropped The business is flowing through its supply chain, and PepsiCo is seeing the benefits of that in additional consumption points and...
- Dropped PepsiCo does expect, like you said, about approximately 1 point of EPS benefit from tariff refund claims likely in the...
- Fading PepsiCo's Middle East business continues to perform a very good level.
Latest announcements
Official filings, newest first. Summaries are generated from each filing and its attachment; every figure is checked against the source.
- Other events · SEC 8-K
- Results of operations · SEC 8-K
PepsiCo reported third-quarter 2026 net revenue of $25.274 billion, up 5.6% from $23.937 billion in the same period last year.
- Director or officer change · SEC 8-K
PepsiCo elected Joaquin Duato as an independent board member and Audit Committee member effective December 1, 2026, with a compensation package including 1,000 shares of common stock and a $60,000 annual cash retainer.
- Results of operations · SEC 8-K
PepsiCo reported second-quarter 2026 net revenue of $24.181 billion, up 6.4% from $22.726 billion in the same period of the previous year.
- Other events · SEC 8-K
PepsiCo entered into a new $5,000,000,000 unsecured revolving credit agreement on May 22, 2026, replacing a previous $5,000,000,000 agreement that had no outstanding borrowings at the time of termination.
- Shareholder vote results · SEC 8-K · routine
- Results of operations · SEC 8-K
- Other events · SEC 8-K
PepsiCo received net proceeds of approximately €2,482 million from an offering of Floating Rate Notes and Senior Notes due in 2028, 2034, 2038, and 2047.
Catalyst calendar
management-stated targets — from the latest earnings call; plans, not promises.
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as we turn the calendar year
benefits from cost reduction and revenue management tools starting to help
Source quote
“These benefits should start helping as we turn the calendar year.”
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February
provide more detail on 2027 expectations
Source quote
“We'll give more detail on our 2027 expectations in February when we report the fourth quarter.”
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next year
maintain the top-line momentum
Source quote
“For us, priority, as Steve was saying, going into next year, is to maintain the top-line momentum.”
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2027
enter with a lot of momentum
Source quote
“We want to enter 2027 with a lot of momentum and make sure that we manage the business for the long term, which is what we're doing.”
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next 12, 18 months
consumer not expected to be in a much better place
Source quote
“We don't expect the consumer to suddenly become in a much better place in the next 12, 18 months.”