PepsiCo,the world largest food,snacks and beverage company,the company's brands including Pepsi-Cola,Frito-lay,Tropicana,Quaker,Gatorade,all of which are famous around the world.
For the year of 2011,revenue grew 15% to 66,504 million,net profit got a flat result,that said 6,643 million,grew 1.95%.Now PepsiCo is trading around 15.61x multiplier, discounting 20% to KO's multiplier.
Let's do a simple dissembling of PepsiCo's business,that mean on a sum-of-the-part basis,now forty percent of PepsiCo's profit comes from beverage business,that is about 2,560 million,we use KO as a comparison for beverage business,and discount 10% to KO's multiplier,which means the business of beverage's valutation is about 36 billion.As for food business,we apply a average multiplier of large-cap food company peers,e.g.Kraft Foods Inc,General Mills,Kellogg Co,and we get the valuation of food business is about 67.4 billion.
As shown above,the result of sum-of-the-part valuation is 103.4 billion,now the company is trading around 98 billion.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.