PEPSICO CORPORATION
STOCK ANALYSIS
Presented by:
St. John’s University Undergraduate
Student Managed Investment Fund

April 29, 2003
Recommendation: Purchase 400 shares of PepsiCo stock at market order
Industry: Food and Beverage
Kristopher Cartagena – kcart26@yahoo.com
Dion Demetropoulos – Ddeme829@aol.com
Tenisha Martin – tenishax@hotmail.com
Share Data:
Price - $42.65
Date – April 25, 2003
Target Price - $50.65
52 Week Price Range - $53.23 - $34.00
Market Capitalization – 74.5 billion
Shares Outstanding – 1.72 billion
Revenue 2002 – $25.112 billion
Stock Chart:

Fundamentals:
P/E 2002 – 22x
P/E 2003 – 19x
Earnings Per Share Estimate:
EPS 2003E = $2.28
EPS 2003 Consensus = $2.20
EPS 2004E = $2.45
EPS 2004 Consensus = $2.44

MEMORANDUM
TO:

Student Managed Investment Fund
St. John’s University

FROM:

Kristopher Cartagena
Dion Demetropoulos
Tenisha Martin

DATE:

April 29, 2003

SUBJECT:

ANALYSIS OF PEPSICO STOCK AS AN UNDERVALUED
SECURITY

This is the research report that was requested on January 23, 2003 about PepsiCo stock and whether it should be incorporated in to the Student Managed Investment Fund. The analysis was done primarily through secondary research. The analysis revealed that
PepsiCo’s stock is currently undervalued at $42.65, as of April 25, 2003.
We used a relative valuation model, and determined PepsiCo’s target price to be $50.65.
In addition, we used a multi-stage dividend discount model, and determined the stock’s intrinsic value to be $56.83. PepsiCo’s current price of $42.65 is lower than both our target price and its intrinsic value. This confirmed our belief that the stock was undervalued. We also analyzed the company’s management strategies, financial data, products, performance in its markets, as well as other business indicators of the health of a company.
After conducting a