PepsiCo Inc. (NASDAQ:PEP)

Price to Earnings (P/E) Ratio Trends

The Price to Earnings ratio exhibits fluctuations over the observed periods. Initially around 26 in early 2020, it rises to a peak near 39.71 by mid-2023, indicating increased investor expectations or valuation expansion relative to earnings at that time. Following this peak, there is a discernible decline through the end of 2025, reaching values near 19.8 to 20.55 before a slight uptick towards the last quarters observed. Overall, this suggests a phase of valuation contraction after a period of growth in market valuation relative to earnings.

Price to Operating Profit (P/OP) Ratio Dynamics

The P/OP ratio similarly reflects variability, with values starting near 18.5 in early 2020, rising to a peak close to 29.45 in the middle of 2023. This peak is sharper than that observed in the P/E ratio, pointing to potentially elevated valuations relative to operating profit during that timeframe. Subsequently, the ratio decreases steadily, dropping below 15 in mid-2025 before rising slightly again towards the most recent periods. This trend indicates a marked revaluation downwards after the peak, suggesting changing investor sentiment or operating profit performance.

Price to Sales (P/S) Ratio Behavior

The Price to Sales ratio demonstrates more moderate fluctuations, generally oscillating between approximately 2.0 and 3.0 throughout the period. It shows a modest upward trend reaching near 3.0 in early 2023, followed by a decline and stabilization around 2.1 to 2.5 in later periods. This relative stability and smaller range of variability suggest steadier market valuation relative to sales compared to earnings or operating profit measures.

Price to Book Value (P/BV) Ratio Characteristics

The Price to Book Value ratio displays a gradual downward trend overall. Starting at values exceeding 14 in early 2020, it declines gradually through the years, falling below 11 towards the end of the timeline. This steady decrease may reflect a contraction in market valuation relative to book equity, possibly indicating changes in asset valuation perceptions or balance sheet strength over time.

Summary of Observations

The financial ratios collectively indicate that market valuations expanded significantly relative to earnings and operating profits up to mid-2023, followed by a pronounced correction or normalization phase through 2025. Ratios based on sales show less volatility, suggesting more consistent investor interpretation of revenue streams. The declining Price to Book Value ratio highlights a concurrent decrease in valuation relative to net asset measures. Taken together, these trends may point to evolving market conditions, adjustments in growth expectations, or shifts in profitability metrics affecting investor confidence and valuation.

Share Price Trend

The share price exhibits notable fluctuations across the observed periods. From early 2020 through to late 2021, there is a general upward trajectory with intermittent minor declines, peaking initially around December 2021. The price reaches a high point near $189.71 in March 2023 but then undergoes a downward correction in late 2023. Subsequent quarters in 2024 reveal increased volatility, with the price dipping to approximately $143.49 before partially recovering to around $144.71 by late 2025. Overall, despite short-term fluctuations, the share price demonstrates a modest growth trend from 2020 to 2023, followed by greater variability and some price erosion towards the end of the period.

Earnings Per Share (EPS) Evolution

EPS data, available from March 2021 onwards, shows a generally positive growth pattern with some variability. Starting at 5.16 US$ per share, EPS increased to peaks above 7.00 US$ in mid-2022, reflecting solid profitability improvements during that phase. However, from early 2023, EPS figures demonstrate a decline with values fluctuating between approximately 4.78 US$ and 6.98 US$. Toward the latter part of the series, EPS stabilizes somewhat in the 5.20 US$ to 6.80 US$ range but does not return to earlier highs. The data suggests that the company experienced a period of stronger earnings growth which tempered in recent quarters, indicating potential challenges or market pressures affecting profitability.

Price-to-Earnings (P/E) Ratio Dynamics

The P/E ratio exhibits considerable changes corresponding to the fluctuations in share price and EPS. Initially, in the mid-2021 period, P/E ratios hovered around the mid-20s, indicating moderate market valuation relative to earnings. A pronounced peak occurs in early 2023, with the ratio rising to nearly 40, signaling high investor expectations or possibly reduced earnings relative to share price increases. Subsequent periods show a gradual decline in P/E to levels around 20 by mid-2025, suggesting a market correction or stabilizing expectations as earnings and prices adjust. The pattern points to periods of heightened valuation, followed by normalization as the share price and earnings realign.

Interrelationships and Insights

There is a discernible correlation between EPS growth and share price appreciation during the earlier part of the timeline, with both rising in tandem. The later divergence, where share prices decline while EPS remains relatively stable or slightly decreasing, results in compressed P/E ratios, indicating a shift in market sentiment or external factors influencing investor confidence. The volatility across share prices and P/E ratios in 2024 and 2025 suggests increased uncertainty or transitional dynamics within the company or broader market conditions. The flattening and occasional decline in EPS alongside fluctuating market valuation imply the need for monitoring operational performance and external risks that could affect future profitability and investor perceptions.

Share Price Trend

The share price exhibited fluctuations over the examined periods, beginning at $136.32 and experiencing moderate variability. Notably, the price peaked at $189.71 before declining in subsequent quarters, ending near $144.71. This pattern suggests periods of both growth and correction, with several short-term recoveries followed by downward adjustments.

Operating Profit Per Share (OPPS)

The operating profit per share data is available starting from a later quarter, showing an initial steady increase from approximately $7.31 to over $8.26. Following this, a more pronounced rise occurred reaching a peak around $10.21. Post-peak, a decline ensued to around $6.44, after which the OPPS generally displayed moderate recovery and fluctuations, stabilizing near $7.45 towards the end of the period. This indicates a phase of profitability growth, a subsequent downturn, and later stabilization.

Price-to-Operating Profit Ratio (P/OP)

The price-to-operating profit ratio moved inconsistently across the periods. Initially, it lingered close to the 18–20 range but spiked sharply to nearly 29.45, reflecting possibly an overvaluation or a decline in operating profit relative to share price. Later observations show the ratio decreasing back to mid-teens, followed by an increase again, ending near 19.42. This oscillation highlights varying market perceptions about the valuation of operating profits with respect to share price, suggesting changing investor confidence or profitability dynamics.

Overall Interpretation

The data collectively indicates a cycle characterized by growth in operating profit per share, reaching a high point, followed by contraction and partial recovery. The share price broadly follows this pattern but with less pronounced volatility, indicating possible external influences impacting the share price beyond operating performance. The P/OP ratio's volatility underscores shifts in market valuation and investor sentiment over time. These insights point to a dynamic financial performance environment with phases of expansion and contraction.

Share Price Trend

The share price exhibited notable fluctuations over the analyzed periods. Starting around the mid-130s in early 2020, it rose steadily to reach a peak near 189.71 in March 2023. Subsequently, a downward trend emerged with some volatility, dropping to approximately 135.31 by mid-2025. The trend indicates an initial growth phase followed by a decline towards the latter periods.

Sales per Share Pattern

Sales per share demonstrated consistent growth across the available data, beginning from just above 51 US$ in early 2021 and increasing gradually to approximately 67.55 US$ by mid-2025. This steady upward movement suggests an improvement in revenue generation on a per-share basis over time, with minor fluctuations stabilizing in the later periods.

Price-to-Sales Ratio (P/S) Analysis

The P/S ratio showed some variation throughout the periods. Starting at around 2.65 in early 2021, it experienced a moderate increase, reaching peaks near 2.97 by early 2023, before declining to approximately 2.14 by mid-2025. The decreasing P/S ratio in the latter stages, coupled with rising sales per share but falling share prices, implies market valuation compression relative to sales performance.

Overall Insights

The combined analysis reveals that while sales per share have steadily increased, indicating improved operational performance or revenue growth, the share price did not sustain corresponding gains in the latter periods. The declining P/S ratio suggests that the market may have adjusted expectations or valuation multiples downward despite improving sales metrics. This divergence could be influenced by external market conditions, investor sentiment, or other financial factors not captured in the data.

The share price exhibited notable fluctuations over the observed periods. Starting at $136.32 in March 2020, it experienced a general upward trend reaching a peak near $189.71 in March 2023. Following this peak, the share price demonstrated a downward trend with intermittent recoveries, dropping to approximately $144.71 by September 2025. Despite this decline from the peak, the share price remained above its initial levels from early 2020.

The book value per share (BVPS) showed a consistent upward trajectory throughout the timeline. Beginning at $9.7 in March 2020, it rose steadily, with minor fluctuations, reaching around $14.18 by September 2025. This growth indicates an increase in net asset value per share, suggesting potential strengthening of the company's fundamentals.

The price-to-book value (P/BV) ratio displayed a general decline over the period analyzed. Initially high at 14.05 in March 2020, the ratio dropped progressively, with some short-term oscillations, reaching a low near 10.09 by June 2025. A slight rebound followed, ending around 10.21 in September 2025. This decreasing P/BV ratio suggests that the market's valuation per unit of book value diminished over time, potentially reflecting adjustments in market perception or valuation metrics relative to the company's underlying net assets.

Share Price Trends

Initial moderate fluctuations followed by strong appreciation until early 2023, then a decline with intermittent recoveries through late 2025.

Book Value per Share (BVPS)

Steady increase indicative of consistent growth in shareholders' equity on a per-share basis.

Price-to-Book Value (P/BV) Ratio

Downward trend indicating a gradual decrease in market valuation relative to the company's book value, signaling cautious market sentiment or reevaluation of asset value multiples.

In summary, while the share price saw considerable gains culminating in early 2023 before correction, the underlying book value per share steadily increased, reflecting solid balance sheet growth. The declining P/BV ratio throughout the period suggests that despite growing book value, market valuations became more conservative relative to these fundamentals. This combination may reflect shifting investor risk appetite, market conditions, or reassessments of future growth prospects over the timeframe analyzed.