I’ve been cautious on PepsiCo (PEP) for some time as I’ve thought the company’s valuation against its growth prospects was out of line. I explained as much recently and while PEP has been exhibiting some margin growth of late – powering the bull case – I’m not so sure. In this article I’ll be using some data from Seeking Alpha to show that while PEP isn’t a disaster by any means, it doesn’t appear to be the rip-roaring bull case some would have you believe.
We’ll begin with a look at five years of pretax income data to get an idea of where PEP has come from, which will help inform the larger conversation on its margin prospects.
