PEP faces near-term pressure — weaker bottom-line guidance, down margins, FTC pricing pressure, smaller brands cutting pricing power — but the speaker is long-term positive: ~15x expected earnings, ~4.7% rising dividend yield, much negativity priced in, and PEP may be a long-term survivor/winner; near term unclear.

Welcome back to the show. Pepsi reported earnings late last week and said that revenue grew about as expected. Nothing earthshattering from a company like Pepsi, but margins are going to be down.

Their guidance was a little bit weaker on the bottom line than expected.

Boy, I sure hope that they can't pass any more of them on because they've already done a great job of passing them on so far.

There was a Federal Trade Commission lawsuit late last year that alleged collusion between PepsiCo and Walmart uh which allegedly gave Walmart preferential supplier pricing over the smaller retailers that Pepsi serves.

And I think, you know, regardless of the merits of the suit, which way it's going to end up, you know, what kind of settlement it might result in, it just highlights the pressure that PepsiCo and the retail community are seeing to keep those consumer price increases under control.

Lou, it seems like Pepsi is running into a number of different challenges, you know, that we could peel apart and spend an entire show on, but you have the supply dynamics where suddenly these smaller brands are available. So that gives you a little less pricing power.

But, but here's the deal, guys. And you know, I mean, I I'm going to have to hold my nose and do this and I'm not there yet, but um Dan, I agree with everything you say about all of the issues they're facing and all of that.

And I also kind of believe in these brands. We're down to about 15 times expected earnings. We got a dividend yield hovering near 4.7% and going up. I look near-term I don't know what they do but long term if we are an invest if we're investors this is beginning to look more appetizing than maybe a lot of their products to me because at some point I think they are a survivor and long-term winner here and a lot of the negativity seems to be priced in at this point and I guess I need to be interested in the even if I don't want to take a bite I don't know what am I doing