Pepsi Co

Analyst Listing

The following analysts provide coverage for the subject firm as of May 2016:

Broker	Analyst	Analyst Email
Bernstein Research	Ali Dibadj	ali.dibadj@bernstein.com
BMO Capital Markets	Amit Sharma	amit.sharma@bmo.com
CRT Capital Group	April Scee	ascee@sterneageerct.com
Deutsche Bank Research	Bill Schmitz Jr.	william.schmitz@db.com
Wells Fargo Securities	Bonnie Herzog	bonnie.herzog@wellsfargo.com
Consumer Edge Research	Brett Cooper	bcooper@consumeredgeresearch.com
Athlos Research	Jonathan P. Feeney	jonathan@athlosresearch.com
First Global Stockbroking	Kavita Thomas	kavita.thomas@fglobal.com
Jefferies	Kevin Grundy	kgrundy@jefferies.com
Stifel Nicolaus	Mark D. Swartzberg	mswartzberg@stifel.com
RBC Capital Markets	Nik Modi	nik.modi@rbccm.com
Susquehanna Financial Group	Pablo Zuanic	pablo.zuanic@sig.com
Evercore ISI	Robert Ottenstein	robert.ottenstein@evercoreisi.com
Cowen & Company	Vivien Azer	vivien.azer@cowen.com

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Primary Input Data

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Derived Input Data

Derived Input	Label	2015 Value	2016 Value	Equational Form
Net Operating Profit Less Adjusted Taxes	NOPLAT	6,572	6,705	$NOPLAT\, =\, EBIT\, x\, (1 \,-\, Avg \,\,Tax\,\, Rate\,\, on\,\, EBIT)$
Free Cash Flow	FCF	7,822	7,364	$FCF\,=NOPLAT\,+\,Non-Cash\,Expenses-\Delta NWC\,-\,NCS$
Tax Shield	TS	205	209	$TS\,=\,Interest\,\,Paid\,\,x\,\, Avg \,\,Tax\,\,Rate\,\, on\,\, Pre-Tax\,\, Income$
Invested Capital	IC	52,089	52,994	$IC\,=\,Fixed\,\,Operating\,\,Assets\,\,+\,\,Net\,\, Working\,\, Capital$
Return on Invested Capital	ROIC	12.62%	12.65%	$ROIC\,=\,\frac { NOPLAT }{ IC }$
Net Investment	NetInv	2,088	3,273	$NetInv\,=\,{ {IC}_{1}}-{{IC}_{0}}+Depreciation$
Investment Rate	IR	31.77%	48.82%	$IR\,=\,\frac {NetInv}{NOPLAT}$
Weighted Average Cost of Capital	WACC_Market	12.41%	9.76%	$WACC\,=\,\frac { E }{ V } { R }_{ E }\,+\,\frac { P }{ V } { R }_{ P }\,+\,\frac { D }{ V } { R }_{ D }\left( 1- Avg\,\, Tax\,\,Rate\,\,on\,\,Pre-Tax\,\,Income \right)$
Weighted Average Cost of Capital	WACC_Book	6.55%	6.23%
Enterprise value	EV_Market	166,584	168,020	$EV\,=\,Market\,\,Cap\,\,Equity\,+\,\,Long\,\,Term\,\,Debt\,-\,Cash$
Enterprise value	EV_Book	158,670	163,340
Long-Run Growth	g = IR x ROIC	4.01%	6.18%	Long-run growth rates of the income variable are used in the Continuing Value portion of the valuation models.
Long-Run Growth	g = % $\Delta$ GDP	2.50%	2.50%
Margin from Operations	M	16.03%	16.42%	$M\,\,=\,\,\frac{EBIT}{SALES}$
Depreciation/Amortization Rate	D	19.29%	18.67%	$D\,\,=\,\,\frac{D+A}{EBITDA}$

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Valuation Multiple Outcomes

The outcomes presented in this study are the result of original input data, derived data, and synthesized inputs.

Equational Form	Observed Value		Single-stage multiple g solution		Two-stage valuation model g solution
Equational Form	12/31/2015	12/31/2016	12/31/2015	12/31/2016	12/31/2015	12/31/2016
EV/SALES $\frac {EV}{Sales} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(M)$	2.64	2.68	12.32%	8.42%	12.36%	9.04%
EV/EBITDA $\frac {EV}{EBITDA} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(1\,-\,D)$	13.30	13.25	12.32%	8.42%	12.36%	9.04%
EV/NOPLAT $\frac {EV}{NOPLAT} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}$	25.35	25.06	12.32%	8.42%	12.36%	9.04%
EV/FCF_OPS $\frac {EV}{FCF_{OPS}} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)$	21.30	22.82	12.32%	8.42%	12.36%	9.04%
EV/EBIT $\frac {EV}{EBIT} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)$	16.48	16.29	12.32%	8.42%	12.36%	9.04%
EV/IC $\frac {EV}{IC} \,= \,\frac{ROIC\, -\, g}{WACC\,-\,g}$	3.20	3.17	12.32%	8.42%	12.36%	9.04%

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