Reviewed by Gotrade Internal Analyst
Jakarta, Gotrade News - Soda giants The Coca-Cola Company and PepsiCo are reportedly reviewing their strategy in Venezuela. This move comes as the Latin American nation shows signs of economic improvement and supply chain stability.
Key Takeaways
- Geopolitical shifts and US involvement could finally stabilize Venezuela's currency.
- Historically, Venezuela was one of the most profitable markets for the soda industry.
- PepsiCo is currently trading near its historical valuation lows.
Venezuela used to be a goldmine for the soft drink industry, thanks to a mix of oil revenue and high soda consumption. According to a report by Seeking Alpha, this was one of the most profitable markets in Latin America before the economic crisis hit.
Currently, both companies operate via local partnerships to mitigate high operational risks. PepsiCo maintains its presence through a joint venture with Empresas Polar, while Coca-Cola operates through local bottlers tied to Coca-Cola FEMSA.
The main driver for this strategic review is increased US involvement in the region. Seeking Alpha analysis suggests this could pave the way for plant modernization and currency stabilization in the medium term.
Attractive Valuation Amid Expansion
You should keep an eye on PepsiCo's financial position, which looks pretty attractive right now. Data from GuruFocus shows PepsiCo is trading near its lowest Price-to-Sales (P/S) ratio in the last 10 years.
PepsiCo's financial health remains solid with an Altman Z-Score of 3.44, indicating a strong balance sheet. However, investors should still watch out for the dividend payout ratio, which is sitting quite high at 0.75.
Read also: Stocks Hit Record Highs as Investors Weigh Venezuela Conflict
A return to stability in the Venezuelan market could be a catalyst for international revenue growth for both tickers. For those of you holding stocks in the consumer defensive sector, geopolitical developments here are the key drivers to watch for the next price action.
Reference:
- Seeking Alpha, PepsiCo and Coca-Cola's long history in Venezuela takes a new turn. Accessed on January 5, 2026
- GuruFocus, PepsiCo (PEP) and Coca-Cola (KO) Eye Strategic Reset in Venezuela. Accessed on January 5, 2026
- Featured Image: Shutterstock
Disclaimer
Gotrade is the trading name of Gotrade Securities Inc., registered with and supervised by the Labuan Financial Services Authority (LFSA). This content is for educational purposes only and does not constitute financial advice. Always do your own research (DYOR) before investing.
