PEP – Market expectations are for record-high Uniform ROA, but management has concerns about pricing, their snack business, and their Mountain Dew products

• PepsiCo, Inc. (PEP:USA) currently trades at historical highs relative to UAFRS-based (Uniform) Earnings, with a 28.6x Uniform P/E, implying bullish expectations for the firm. However, management has concerns about pricing, their snack business, and their Mountain Dew products
• Specifically, management may lack confidence in their ability to become more customer-centric, and they may be concerned about the sustainability of recent price-per-occasion growth in their snack business. Furthermore, they may be exaggerating the functionality of their Bolt24 product and the impact urbanization has on their snack business. Finally, they may be concerned about their ability to reinvigorate their Mountain Dew product portfolio, and they may have concerns about their pricing strategy in developing markets.