PepsiCo (PEP, Financial) has finalized its purchase of the soda brand poppi for $1.95 billion. This figure includes anticipated cash tax benefits, resulting in a net cost of $1.65 billion. Additionally, the deal features an earnout provision based on certain performance targets being met.
Poppi is known for its innovative approach to sodas, focusing on healthier options that resonate with younger consumers. Offering functional beverages made with prebiotics, fruit juice, and apple cider vinegar, each product contains no more than five grams of sugar per serving. The brand has gained popularity through eye-catching packaging and strategic engagement with audiences on social media, particularly appealing to Gen Z and millennials through TikTok campaigns and influencer collaborations.
Centerview Partners led the financial advisory for PepsiCo, with J.P. Morgan Securities also contributing. Legal advice was provided by Cravath, Swaine & Moore, while tax counsel came from Davis Polk & Wardwell. Poppi’s advisory team included Goldman Sachs & Co. for financial advice and Cooley for legal guidance.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 21 analysts, the average target price for PepsiCo Inc (PEP, Financial) is $150.06 with a high estimate of $169.00 and a low estimate of $110.00. The average target implies an upside of 13.70% from the current price of $131.98. More detailed estimate data can be found on the PepsiCo Inc (PEP) Forecast page.
Based on the consensus recommendation from 24 brokerage firms, PepsiCo Inc's (PEP, Financial) average brokerage recommendation is currently 2.8, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for PepsiCo Inc (PEP, Financial) in one year is $179.59, suggesting a upside of 36.07% from the current price of $131.98. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the PepsiCo Inc (PEP) Summary page.
