Key Stats for PepsiCo Stock
- Current Price: $128.38
- Target Price (Mid): ~$181
- Street Target: ~$142
- Potential Total Return: ~41%
- Annualized IRR: ~8.5% / year
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What Happened?
KFC’s U.S. restaurants will switch from PepsiCo (PEP) to Coca-Cola (KO) drinks, the chain said on October 15, according to CNBC. The transition begins in January 2027 and wraps up by spring, ending a partnership that dates to PepsiCo’s 1986 purchase of KFC. Pepsi remains a partner for KFC in international markets, though some of those already serve Coke. PepsiCo shares closed down 0.69% at $128.38 that day.
The loss comes a week after PepsiCo cut its 2026 core EPS growth outlook to 2.5% to 3.5% in its third-quarter investor relations materials. On the October 8 call, Chairman and CEO Ramon Laguarta was blunt: “We’re not competing well in soft drinks.”
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KFC Walked Away From the Soda Business PepsiCo Is Trying to Fix
Laguarta said PepsiCo is competing well in hydration and energy, but not in soft drinks. Later on the call, he pointed to key competitors “having increased their investment in the portfolio, and it’s working.” PepsiCo’s answer is more investment behind Pepsi, Mountain Dew and Poppi, plus sharper execution.
KFC U.S. President Catherine Tan-Gillespie tied the switch to the chain’s turnaround push. Reports of the deal did not include financial terms, so the revenue at stake cannot be sized.
Part of Q3’s Beverage Profit Came From a Smaller Poppi Earnout
PepsiCo Beverages North America (PBNA) earned $1.056 billion of operating profit on $7.706 billion of Q3 revenue, per the 10-Q. Two supports behind that figure are fading:
- Poppi: PepsiCo owes Poppi’s former owners a $300 million payment only if the brand hits undisclosed milestones by Q3 2027. The company values that liability using Poppi’s revenue and margin forecasts. In Q3 it cut the fair value by $105 million to $12 million, and PBNA booked $97 million of acquisition-related credits, primarily from that change. A PepsiCo spokesperson said Poppi still grew volume by double digits in Q3, so the markdown reflects the goals, not a shrinking brand.
- Tariffs and hedges: CFO Steve Schmitt said a Q3 tariff benefit in PBNA goes away, which “puts some more underlying pressure on the North America Beverages business.” Commodity hedges of six to 12 months are also rolling off.
Laguarta added that PepsiCo is studying whether to “expand or accelerate some of the refranchising” in parts of the U.S. That is an option under review.
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TIKR Advanced Model Analysis
- Current Price: $128.38
- Target Price (Mid): ~$181
- Potential Total Return: ~41%
- Annualized IRR: ~8.5% / year
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The TIKR mid case points to around $181 by December 31, 2030, a ~41% gain, or ~8.5% a year. That is the price change alone, so dividends would add to it; the forward yield was 4.7% as of October 15.
Separately from the model, Street consensus sees revenue growing about 3% a year to about $110 billion in 2030. Normalized EPS reaches around $9.80, a CAGR of about 4% from $8.14 in 2025. Laguarta said international, already 45% of profit year-to-date, has been a big driver of growth.
The catch is the multiple. Around $181 equals about 19x 2030 consensus GAAP EPS of around $9.61, above PepsiCo’s 16.15x trailing GAAP P/E as of October 15. A re-rating as North American beverages stabilize would put the target within reach. At an unchanged 16.15x, that EPS points to about $155, still above $128.38, so the weaker case is a smaller gain unless estimates fall.
Conclusion
Schmitt said PepsiCo will detail its 2027 expectations with Q4 results in February, while KFC’s switch is under way. A beverage outlook that holds up without Poppi credits or tariff help would support a higher multiple. Another margin-driven cut would make the roughly $142 Street mean target look like the ceiling. Seventeen of 24 analysts already rate the stock Hold.
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So what is PepsiCo stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
