PEP – Market expectations are for record-high Uniform ROA, but management may be concerned about their business opportunities, brands, and logistics

• PepsiCo, Inc. (PEP:USA) currently trades near historical highs relative to UAFRS-based (Uniform) earnings, with a 32.6x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may be concerned about their business opportunities, energy drink brands, and logistics disruptions
  
  

• Specifically, management may lack confidence in their ability to invest in high ROI opportunities, and may be concerned about their ability to be aggressive in
  their commercial business once quarantine restrictions are lifted. Furthermore, management may lack confidence in their ability to address the logistics disruptions in their Gatorade products. In addition, they may be exaggerating the strength of their energy drink brands in Eastern Europe and Mountain Dew’s potential in the energy drink market. Finally, they may be downplaying concerns about restrictions in the way they manage their portfolio