PepsiCo (PEP) has seen shares peel back over the last several months, falling from just over $120, to as low as $96. Since May, shares have rebounded, rising over 9% from their low.

PEP data by YCharts

Despite the run back up, we believe shares have further upside, likely reaching their $120 level by the end of the year. With Pepsi making itself comfortable in the healthy snacks market, we expect further M&A to continue as the company puts its pile of cash to use.

The fact that the health snacks space is fragmented only makes it better, providing a consolidation opportunity for Pepsi and accelerating their market share growth in the space. When coupled with a relatively low valuation, and strong dividend yield, we see this as a good time to begin building a long-term position in PepsiCo.

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