Coca-Cola vs. PepsiCo: Which Soft Drinks Behemoth Stays on Top?
At the heart of this rivalry lies a battle for market share, brand dominance and strategic edge. Coca-Cola is focused on its beverage-only strategy to drive global reach and scale. Meanwhile, PepsiCo plays a broader game, leveraging its vast portfolio of food and beverage brands to capture share across consumption occasions. As the industry shifts toward health-conscious choices and evolving consumer preferences, the question remains: Which of these beverage behemoths is better positioned to stay on top?
Let us dive into the numbers, strategies and positioning that define this classic corporate showdown.
The Case for KO
Coca-Cola stands tall as a global beverage powerhouse, commanding a leading share in the soft drinks industry through its focused beverage business model. The company dominates the global non-alcoholic beverage market with $30-billion brands and industry-leading value share gains for 17 consecutive quarters. Its expansive portfolio spans carbonated drinks, juices, teas, dairy and sports beverages, anchored by powerhouse brands like Coca-Cola Zero Sugar, Sprite and fairlife.
Coca-Cola's strength lies in its ability to drive consistent brand relevance across diverse markets, from affordable multi-serve packs in Latin America to premium mini-cans in Europe, while steadily gaining value share quarter after quarter.
Strategically, KO is focused on affordability, digital engagement and premium innovation. Coca-Cola continues to sharpen its edge through bold marketing, local customization, and digital innovation. Campaigns like 'Share a Coke' and 'Bring the Juice' tap into cultural moments, while AI-led pricing tools and connected packaging boost engagement and efficiency. Its growing digital platforms are connecting directly with millions of retailers, especially in fast-moving markets like India.
The company's marketing transformation not only boosts reach but also yields measurable productivity gains. In the second quarter of 2025, Coca-Cola expanded margins by up to 190 basis points, thanks to disciplined execution, operating leverage and cost efficiencies.
The company also adapts swiftly to shifts in consumer behavior and market volatility, whether it is geopolitical disruption, erratic weather or evolving preferences. Rather than be derailed by global trade headwinds or currency fluctuations, Coca-Cola leverages local sourcing and strategic hedging to maintain momentum. Backed by strong execution, smart reinvestment and a resilient system, the company continues to reinforce its leadership in the ever-evolving global beverage landscape.
The Case for PEP
PepsiCo's investment case is underpinned by its unmatched scale, diversified portfolio, and strong foothold across beverages and snacks. In the soft drinks arena, PepsiCo continues to gain market share, especially through the growing momentum of Pepsi Zero Sugar and popular variants like Wild Cherry and Baja Blast. Its beverage business complements a dominant snack portfolio, anchored by household names like Lay's, Doritos, and Sun Chips.
With both beverage and food brands commanding loyalty across demographics and consumption occasions, PepsiCo positions itself as a one-stop refreshment powerhouse. The company's share of the global soft drinks market is substantial, but its broader consumer packaged goods portfolio extends its moat beyond traditional rivals.
Strategically, PepsiCo is driving forward with a multipronged approach: refining its price-pack architecture, expanding into functional beverages and better-for-you snacks, and deepening its presence in international markets. Recent acquisitions like prebiotic soda brand Poppi illustrate how PepsiCo is capturing Gen Z attention while innovating around wellness trends.
Meanwhile, large-scale digital initiatives, ranging from AI-driven demand forecasting to trade promotion optimization, are sharpening execution and boosting agility. The 'One North America' initiative integrates its food and beverage operations, unlocking synergies and enabling smarter, streamlined investments into growth and marketing.
Despite global tariff pressures and inflation-driven supply-chain challenges, PepsiCo is navigating headwinds through strategic sourcing adjustments, localized manufacturing and pricing precision. Its proactive cost-control measures and productivity programs — from automation to footprint optimization — are freeing up capital for reinvestment while protecting margins. Backed by robust brand equity, operational resilience and a future-facing innovation pipeline, PepsiCo remains a compelling long-term bet in the global consumer staples space.
Price Performance & Valuation of KO & PEP
Shares of PepsiCo have moved higher in the past three months, buoyed by strong second-quarter 2025 results and an encouraging earnings outlook. The company witnessed accelerated net revenue growth compared with the previous quarter, underscoring its ability to perform amid a complex operating environment. International momentum remained a key strength, while North America showed signs of recovery through sharper execution and improved competitiveness across major subcategories and channels.
In contrast, Coca-Cola's stock has slipped in the same period despite a solid second-quarter performance and steady global execution. The divergence highlights shifting investor sentiment, with growing optimism around PepsiCo's operational turnaround and margin-improvement efforts. In the past three months, PEP shares have rallied 8%, while the KO stock has declined 3.8%.
From a valuation standpoint, PEP currently trades at a lower forward price-to-earnings (P/E) multiple of 17.66X compared with Coca-Cola's 22.26X, making it more attractively priced, driven by its earnings and diversified revenue stream.
The PEP stock looks cheap from a valuation perspective. Moreover, its diversity, pricing power and innovation engine make it a compelling long-term holding, especially for those seeking both growth and downside protection.
Coca-Cola does seem pricey. However, its valuations reflect its strong brand equity, disciplined capital strategy and exposure to high-growth regions, making it a resilient pick for long-term portfolios. If the company sustains its execution, the premium could be warranted.
How Does Zacks Consensus Estimate Compare for PEP & KO?
PepsiCo's EPS estimates for 2025 and 2026 moved up 1.7% and 1.6%, respectively, in the last seven days. PEP's 2025 revenues are projected to increase 1.2% year over year to $92.9 billion, while EPS is expected to decline 2% year over year to $8.00.
Coca-Cola's EPS estimates for 2025 have been unchanged in the past 30 days, while the consensus estimate for 2026 has moved up by a penny in the past seven days. KO's 2025 revenues and EPS are expected to increase 4.2% and 3.1% year over year, respectively, to $49 billion and $2.97 per share.
PEP vs. KO: Who Has the Edge?
In the latest round of this classic rivalry, PepsiCo edges ahead of Coca-Cola on multiple fronts. A solid three-month stock performance, fueled by a robust second-quarter and improved earnings outlook, signals renewed investor confidence. PepsiCo's ability to execute a strategic turnaround, particularly in its North America operations, while maintaining international momentum, has boosted its market standing. Add to that a more attractive valuation and a diversified portfolio that goes beyond beverages, and PepsiCo presents a stronger investment case at this juncture.
Further bolstering the bullish outlook is the upward revision in PepsiCo's earnings estimates, reflecting optimism around its future profitability. The company's innovation in both product development and digital strategy, coupled with its disciplined cost control and synergy-driven 'One North America' initiative, suggests that it is well-equipped to capture long-term growth. While Coca-Cola remains a stalwart with global brand power, PepsiCo's recent traction and growth potential give it the upper hand in this face-off.
PEP currently carries a Zacks Rank #2 (Buy) and KO has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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