Using the PEG framework with analyst consensus forward EPS growth of 15.9% plus 3.7% dividend yield, PepsiCo, Inc. has a fair value of $137.05 based on NTM EPS (FY2026) of $8.62. The current PEG ratio is 1.11.
PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.
PEG works well for steady growers with predictable earnings.
| EPS Growth RateForward | 12.2% |
| Dividend Yield | +3.7% |
| Adjusted Growth (clamped 8–25%) | 15.9% |
| Fair P/E | 15.9x |
| NTM EPS (FY2026) | $8.62 |
| Fair Value | $137.05 |
| Period | EPS Est. | Growth | Analysts |
|---|---|---|---|
| FY2025 (actual) | $6.00 | — | — |
| FY2026E | $8.62 | +43.7% | 15 |
| FY2027E | $9.20 | +6.7% | 17 |
| FY2028E | $9.85 | +7.1% | 12 |
| FY2029E | $9.94 | +0.9% | 7 |
| FY2030E | $10.67 | +7.3% | 11 |
5Y Forward EPS CAGR: 12.2%
| Year | Net Income | EPS | YoY |
|---|---|---|---|
| FY2021 | $7.6B | $5.48 | — |
| FY2022 | $8.9B | $6.42 | +17.2% |
| FY2023 | $9.1B | $6.56 | +2.2% |
| FY2024 | $9.6B | $6.95 | +5.9% |
| FY2025 | $8.2B | $6.00 | -13.7% |
4Y Historical EPS CAGR: 2.3%
The PEG Fair Value uses the Price/Earnings-to-Growth framework. A stock is fairly valued when its P/E ratio equals its earnings growth rate (PEG = 1.0). This model adds dividend yield to the growth rate per the original PEGY formula.
Growth rate priority: analyst consensus forward EPS CAGR (when ≥ 3 analysts cover the stock), falling back to historical EPS CAGR. Using EPS rather than net income avoids distortion from share buybacks. The growth rate is clamped between 8% and 25% — below 8% would undervalue stable earners, while above 25% would overvalue unsustainable spikes.