Key Stats for PepsiCo Stock
- Current Price: $128.63
- Target Price (Mid): ~$180
- Street Target: ~$154
- Potential Total Return: ~40%
- Annualized IRR: ~8% / year
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What Happened?
Seven months after cutting prices by up to 15% on brands including Lay’s and Doritos, PepsiCo (PEP) is raising some of them again. On September 24, a company spokesperson told Reuters that some chip brands will rise by a low- to mid-single-digit percentage, in line with inflation. Bloomberg, citing people familiar with the plans, reported that some sodas and dips are also affected.
Shares closed down about 1.6% at $128.15 that day, extending a slide that had already produced a new 52-week low on September 18. The pricing change lands two weeks before the third-quarter results on October 8, when PepsiCo posts its investor relations materials before the open.
PepsiCo Is Trimming a Discount That Won Share but Squeezed Profit
PepsiCo ties the increases to inflation, a pressure CFO Stephen Schmitt flagged on the July 9 call: “We do expect some more pressure on the business from a commodity standpoint.” At the time, Chairman and CEO Ramon Laguarta said the second-half plan was to “optimize the return on investment on some of those pricing investments.” He described that as “trying to get more volume from the investments.”
In PepsiCo Foods North America (PFNA), lower effective net pricing cut Q2 revenue by 2 percentage points while organic volume held flat. Segment net revenue fell 2% to $6,368 million, and core operating profit dropped 8% to $1,369 million. First-half PFNA volume still rose 1%, and the unit gained volume share.
Answering BNP Paribas analyst Kevin Grundy, Laguarta conceded: “Now is the volume as much as we expected? No, not in Q2.” He blamed a weaker, gas-squeezed consumer and execution delays at some customers, now resolved. He also said consumer reaction to the investments was “pretty much along the lines of what we had initially anticipated.”
PepsiCo says the new chip prices will stay below pre-cut levels, and retailers still decide what shoppers pay. The retreat is partial, a test of whether the share gains hold at a smaller discount.
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Wall Street Expects Q3 EPS Growth Under 1%
Consensus calls for third-quarter adjusted EPS of around $2.30 from 17 analysts, less than 1% above last year’s $2.29, on revenue of around $25 billion. The fourth-quarter estimate of around $2.43 implies growth near 8%.
Schmitt explained the gap in July: “Also unique to Q3, we expect to have a higher tax rate year-over-year than what we’ve seen so far this year.” He also expected certain costs to hit the third quarter harder than the fourth, with about a point of EPS help from tariff refunds earmarked against commodity inflation. He added that full-year EPS “may be towards the low end of the EPS range.” Company guidance calls for 4% to 6% core constant-currency growth.
BNP Paribas’s Grundy cut his target to $161 from $183 on September 23 while keeping an Outperform rating, above the ~$154 Street mean. TIKR shows 4 Buys, 3 Outperforms, 16 Holds, 0 Underperforms, and 1 Sell.
From March 21 to September 25, the stock fell about 14% as its forward P/E ratio compressed from 17x to 15x, while TIKR’s NTM EPS estimate rose about 1%. The multiple, in other words, did the damage.
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TIKR Advanced Model Analysis
- Current Price: $128.63
- Target Price (Mid): ~$180
- Potential Total Return: ~40%
- Annualized IRR: ~8% / year
See analysts’ growth forecasts and price targets for PepsiCo stock (It’s free!) >>>
The TIKR model’s mid case projects around $180 by December 31, 2030, about 8% a year from the $128.63 close. Over its 2025 to 2035 forecast window, the mid case assumes around 3% annual revenue growth, a net income margin near 12%, and a slowly shrinking P/E.
Revenue leans on the international segments, where Q2 organic revenue grew 9% in both International Beverages Franchise and Asia Pacific Foods. It also leans on PFNA pricing, turning less negative. That pricing is the margin driver too, and the primary risk is that the increases erase PFNA’s share gains.
Upside comes if pricing sticks without costing volume; the downside is further multiple compression if PFNA volume turns negative.
Conclusion
The third quarter ended September 5, so the October 8 report will not include the new chip prices, which reportedly take effect in late 2026 or early 2027. PFNA volume is the tell. Flat or better, with the 4% to 6% core constant-currency EPS guide reaffirmed, would support the recovery case, while a volume decline or a lowered guide would suggest the discount bought share PepsiCo cannot afford to keep.
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Should You Invest in PepsiCo?
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Pull up PepsiCo, and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.
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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!
