PepsiCo (PEP) has introduced a new 13 ounce bottle size across key soda brands. This move is a direct response to Coca Cola’s 12.9 ounce format that targets portion conscious and budget focused shoppers.

That new 13 ounce format and the wider push into protein snacks and prebiotic drinks comes as PepsiCo’s share price has eased, with the 30 day share price return down 8.40% and the 90 day share price return down 13.80%. Even though the 1 year total shareholder return is 14.08%, this suggests momentum has cooled recently after stronger gains last year.

If this kind of product shift has you thinking about where else growth and change could show up next, it might be worth scanning 20 top founder-led companies

With PepsiCo shares down over the past quarter but still showing a 1 year total return of 14.08%, investors may be considering whether recent product launches and pricing moves leave the stock undervalued, or if the market is already taking future growth into account.

Most Popular Narrative: 10.1% Undervalued

PepsiCo's most followed narrative from the Simply Wall St community points to a fair value of $160.43 per share against a last close of $144.19. This frames the current pullback as a potential discount to that estimate.

Future Efforts: Digitalization:

• Automation of the supply chain.

• Investment in data, enabling large-scale digitalization across the entire value chain (from procurement to factory management, including transportation and market placement).

• Improved understanding of ROI to optimize advertising and marketing expenses. Geographical Expansion:

This fair value hinges on a detailed view of how PepsiCo converts steady revenue growth and stable margins into long term earnings power, according to Serpentaire. Curious which profitability assumptions, future P/E level and discount rate come together to justify that price gap.

Result: Fair Value of $160.43 (UNDERVALUED)

However, investors still need to watch for risks such as execution setbacks in Vietnam and India, or weaker returns from heavy digital and sustainability spending.

Another View: Premium Multiple, Different Message

While the community narrative points to PepsiCo trading at a discount to fair value, the current P/E of 22.6x tells a more mixed story. It sits above the global beverage industry average of 17.3x, yet below peers at 26.6x and a fair ratio of 25.1x that the market could gravitate toward.

For you as an investor, that gap means paying more than the wider industry, but less than closer peers and the fair ratio. The risk or opportunity comes down to whether PepsiCo keeps justifying that premium. Where do you think the market pushes this multiple next: closer to peers, or back toward the sector?

Next Steps

With mixed signals on value and sentiment, this is a moment to move quickly, review the full picture, and weigh both the 3 key rewards and 3 important warning signs

Looking for more investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.