For decades, Coca-Cola (KO) -) has held the crown for being the top beverage company in the U.S. based on market value. But according to a Wall Street analyst, that’s about to change.
PepsiCo (PEP) -) is climbing up the ladder to seize Coca-Cola’s throne as Jefferies analyst Kaumil Gajrawala predicts that PepsiCo’s shares will increase by 20% over the next year. He believes that its market value could rise to about $279 billion. Its current market cap is around $230 billion, which is less than Coca-Cola's at roughly $245 billion.
For Gajrawala, PepsiCo’s recent growth is due to the company’s “hefty investments over the last half decade,” he said in an analyst note. He also said that he expects returns from those investments to “accelerate.”
Related: Ozempic isn't a reason to sell stocks like PepsiCo and McDonald's
PepsiCo, which owns brands such as Pepsi, Gatorade, Lay’s, Tropicana and Doritos, reported a 6.7% increase in net revenue for this year's third quarter compared to the same period last year. The company brought in a total of $23.45 billion in net revenue, which beat analysts' expectations of $23.39 billion.
PepsiCo’s beverages brought in the most revenue in the U.S. during the third quarter, compared to its Frito-Lay and Quaker Foods brands.
“We believe that our businesses can continue to perform well in the coming years with category growth normalizing, as we have made numerous investments in our brands, manufacturing capacity, go-to-market systems, supply chain, technology, and people, to execute against our strategic framework and modernize our company,” said PepsiCo Chair and CEO Ramon Laguarta in an Oct. 10 press release.
PepsiCo’s market value hasn’t surpassed Coca-Cola’s since 2006, which was the first time it did so in its over 100-year rivalry. At the time, PepsiCo’s stock surpassed Coca-Cola’s, who’s stock was tanking more than 30%.
Today, it seems like PepsiCo is continuing to impress Wall Street. Analysts from Goldman Sachs and Cowen also have high hopes for PepsiCo and have even rated the company a buy.
