PepsiCo Stock Gains 4% in a Month: Is It a Smart Buy or One to Watch?

PepsiCo Inc. PEP has registered notable growth in the past month, with shares climbing 3.8%, supported by improving business momentum across key segments. The company delivered healthy net revenue growth in third-quarter 2025, fueled by strengthening momentum in its North America beverage business, solid gains from Trademark Pepsi and robust demand for innovations like Pepsi Zero Sugar and poppi.PepsiCo also benefited from a consistently resilient international operation, which continued to show steady organic growth, and from improved cost-optimization initiatives that helped lift the operating margin. Additionally, recent portfolio reshaping efforts, including acquisitions and a more focused product lineup, contributed to renewed investor confidence and reinforced the company’s positive market trajectory.With 3.8% growth, the company has outperformed the broader Beverages – Soft Drinks industry’s 0.7% rise and the Consumer Staples sector’s 1.1% decline in the past three months. The stock has also outpaced the S&P 500’s growth of 0.5% in the same period.PepsiCo’s 1-Month Price Performance Image Source: Zacks Investment Research PEP’s performance is notably stronger than that of its competitors, The Coca-Cola Company KO and Primo Brands Corporation PRMB, which have declined 2% and 2.3%, respectively, in the past month. PepsiCo’s shares have underperformed Monster Beverage Corporation’s MNST growth of 4.7% in the past month.PEP’s current share price of $149.70 is 6.5% below its recent 52-week high mark of $160.15, reflecting upside potential. Also, the stock trades 17.3% above its 52-week low of $127.60. PepsiCo is trading above its 50 and 200-day moving averages, indicating a bullish outlook for the near and long-term.PEP Stock Trades Above 50 & 200-Day Moving Averages Image Source: Zacks Investment Research What Is Aiding PepsiCo’s Growth?PEP recent momentum is being driven by a combination of strategic, operational and portfolio-focused fundamentals that are strengthening performance across both its beverage and convenient foods businesses. A key contributor is the accelerating growth within PepsiCo Beverages North America, where Trademark Pepsi continues to deliver solid volume and revenue gains, supported by the success of platforms like Pepsi Zero Sugar and growing consumer engagement with flavored varieties. The company is also benefiting from the strong performance in emerging beverage categories, highlighted by the rapid growth of poppi and the continued expansion of functional hydration brands such as Propel.International strength remains another central pillar of PepsiCo’s growth. The business has maintained steady organic revenue expansion across major markets despite weather-related disruptions, driven by strong share gains in beverages, rising penetration of non-sugar offerings, and resilient performance in key regions such as Latin America, Europe, the Middle East and the Asia Pacific. The company’s ability to tailor products to local tastes, expand distribution and leverage partnerships with large franchise bottlers has reinforced steady growth in both beverages and convenient foods abroad.Operational discipline is also aiding growth. PepsiCo is aggressively reducing costs through automation, SKU simplification, optimized manufacturing networks and improved trade promotional spending. These actions are improving service levels, reducing supply-chain complexity, and helping offset higher input costs tied to global ingredients and tariffs. Portfolio reshaping is further strengthening the company’s fundamentals. Recent acquisitions, including poppi, Siete and Sabra, and new commercial agreements, such as the expanded partnership with Celsius, are enhancing category reach and supporting long-term transformation toward permissible, functional and value-driven offerings. Together, these initiatives position PepsiCo for sustained organic growth and margin improvement.PEP’s Estimate Revision TrendThe Zacks Consensus Estimate for PepsiCo’s 2025 EPS moved up by a penny in the last seven days. Meanwhile, the EPS estimate for 2026 has moved down by a penny in the past seven days.The Zacks Consensus Estimate for PEP’s 2025 sales suggests year-over-year growth of 1.8% and that for EPS indicates a decline of 0.6%. For 2026, the Zacks Consensus Estimate for PepsiCo’s sales and EPS implies 3.3% and 5.7% year-over-year growth, respectively. Image Source: Zacks Investment Research PepsiCo’s ValuationPEP is currently trading at a forward 12-month P/E multiple of 16.92X, below the industry average of 18.04X and the S&P 500’s average of 23.44X.At 16.92X P/E, PEP is trading at a valuation much lower than its competitors, such as Coca-Cola and Monster Beverage, which are delivering solid growth and trade at higher multiples. Coca-Cola and Monster Beverage have forward 12-month P/E ratios of 21.89X and 33.22X, both significantly higher than PepsiCo. However, the stock’s current valuation is above Primo Brands’ 11.86X multiple. Image Source: Zacks Investment Research Is PEP a Smart Buy at This Stage?PepsiCo’s recent share gains reflect a company regaining momentum, supported by stronger beverage performance, resilient international demand and disciplined cost actions. Its discounted valuation relative to major peers also suggests an appealing entry point as the market may not fully recognize the recovery underway. However, softer category trends, elevated input costs and ongoing restructuring create near-term uncertainty.For existing investors, holding on to the stock appears sensible as fundamentals gradually strengthen. For new investors, a cautious wait-and-watch stance may be wise until clearer signs emerge that recent improvements are durable and the company can navigate near-term headwinds effectively. PEP currently has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.Free Report: Profiting from the 2nd Wave of AI ExplosionThe next phase of the AI explosion is poised to create significant wealth for investors, especially those who get in early. It will add literally trillion of dollars to the economy and revolutionize nearly every part of our lives.Investors who bought shares like Nvidia at the right time have had a shot at huge gains.But the rocket ride in the "first wave" of AI stocks may soon come to an end. The sharp upward trajectory of these stocks will begin to level off, leaving exponential growth to a new wave of cutting-edge companies.Zacks' AI Boom 2.0: The Second Wave report reveals 4 under-the-radar companies that may soon be shining stars of AI’s next leap forward.Access AI Boom 2.0 now, absolutely free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CocaCola Company (The) (KO): Free Stock Analysis Report PepsiCo, Inc. (PEP): Free Stock Analysis Report Monster Beverage Corporation (MNST): Free Stock Analysis Report Primo Brands Corporation (PRMB): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks