Market expectations are for Uniform ROA to rebound, but management may have concerns about market share, margins, and Frito-Lay pricing

• PepsiCo, Inc. (PEP:USA) currently trades near historical highs relative to UAFRS-based (Uniform) earnings, with a 35.7x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about China and U.S. tea market share, 2022 gross margins, and Frito-Lay pricing execution
  
• Specifically, management may lack confidence in their ability to sustain share gains in China and the U.S. tea market, adapt to China’s changing consumption trends, and execute their pricing strategies for Frito-Lay. Furthermore, they may have concerns about 2022 gross margins, the pace of recovery of their supply chain, and persisting pandemic-related costs. Finally, management may lack confidence in their ability to focus on the energy drink business, mitigate inflationary pressures, and compete through innovation and brand building