PepsiCoNASDAQ: PEP

Walmart and Pepsi are heading in different directions, but both might be interesting to examine more closely.

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Dividends are closely linked to stock prices for Coke and PepsiCo, accounting for more than 90% of their price changes over the past 15 years. Currently, PepsiCo's stock is considered to be undervalued by 9%, while Coke's stock is seen as overvalued by 9.5%. A linear regression model suggests that PepsiCo's stock price could increase to $203.52 by the end of 2025, representing a growth of over 20%.

The S&P 500 might be reaching record levels, but these three reliable stocks are not benefiting from it.

I suggest buying PepsiCo shares, with a target price of $203.08 over the next year, which indicates an 18.2% increase. The company's varied product range and smart acquisitions strengthen its market presence despite competition and changing consumer preferences. Additionally, decreasing inflation and lower commodity prices should help improve PepsiCo's SG&A margin, leading to better profits.

Last November, Letitia James filed a lawsuit against PepsiCo, aiming to hold the company responsible for threatening Buffalo's water supply. She claims that PepsiCo is responsible for 17% of the plastic waste found in and around the Buffalo River.

PepsiCo successfully had New York's lawsuit thrown out, which claimed that the company was harming the environment with single-use plastic packaging. The judge expressed disapproval of the state's attorney general, Letitia James, for initiating the case.

PepsiCo is revamping some of its popular brands, such as Lay's potato chips, as customers seek more affordable choices. A PepsiCo executive mentioned in an interview this week that the company is sharing data with major retailers and, in exchange, receiving valuable insights about shoppers' buying habits.

PepsiCo has been facing a decline in revenue because of issues in its convenient food division and the impact of a product recall in the QFNA segment.