We came across a bullish thesis on PepsiCo, Inc. (PEP) on Value Investing Subreddit Page by suitupyo. In this article, we will summarize the bulls’ thesis on PEP. PepsiCo, Inc. (PEP)'s share was trading at $144.43 as of April 11^th. PEP’s trailing and forward P/E were 20.78 and 17.42 respectively according to Yahoo Finance.

PepsiCo (PEP) is currently revising its earnings downward, but its international growth remains strong. Despite this short-term challenge, the company continues to outpace competitors in key global markets and has made strategic acquisitions in the health food sector. While PepsiCo’s stock is trading lower than Coca-Cola (KO), the two are not perfectly comparable, as PepsiCo has a more diversified business model, including its strong foothold in snack foods, which provides additional growth avenues. Though Coca-Cola has a slightly stronger balance sheet, PepsiCo's debt largely stems from its recent acquisitions. As inflation reports show signs of cooling and financial institutions adjust their recession forecasts, the potential for a rate cut becomes more likely, which would benefit PepsiCo's debt-heavy balance sheet. The stock is now trading near its 52-week low, approaching valuations seen in 2020, making it an attractive entry point for investors. Given PepsiCo’s position as a historically resilient defensive stock with a diversified portfolio and global presence, this current price offers a compelling opportunity for long-term investors.

PepsiCo, Inc. (PEP) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 69 hedge fund portfolios held PEP at the end of the fourth quarter which was 58 in the previous quarter. While we acknowledge the risk and potential of PEP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than PEP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.