Key Stats for PepsiCo Stock
- Price change for PepsiCo stock in last 6 months: -19%
- $PEP Stock Price as of Oct. 8: $128
- 52-Week High: $171
- $PEP Stock Price Target: $149
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What Happened?
PepsiCo (PEP) reported Q3 results that beat Wall Street’s estimates.
- Adjusted earnings were $2.34 per share, compared with the $2.30 analysts expected.
- Revenue came in at $25.27 billion, ahead of the $24.96 billion forecast.
Net income was $3.05 billion, up from $2.6 billion a year ago. Organic revenue grew 3.1%. Beverage volume rose 3%, and food volume rose 1%.
International was the bright spot again. Volume grew in all but one international unit.
On the earnings call, management said international was already 45% of profit so far this year. Operating margin there also expanded.
North America was the weak spot. Beverage volume fell 2%, and food volume was flat.
CEO Ramon Laguarta said the business “performed below our expectations.” Soft drinks were the biggest problem. PepsiCo’s soda brands lagged the category as a whole.
The snack price cuts are helping, though.
PepsiCo cut prices by up to 15% on many snacks in February. Snack volume went from a low single-digit decline last year to low single-digit growth this year.
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What the Market Is Telling Us About PepsiCo Stock
Investors liked the beat, but the outlook tells a more mixed story.
PepsiCo lowered its full-year profit forecast. It now expects core earnings per share to grow 2.5% to 3.5%. Its earlier forecast was the low end of a 5% to 7% range.
Revenue guidance moved the other way. PepsiCo now expects net revenue growth of about 6%. That is the high end of its earlier 4% to 6% range.
So sales look healthy, but profits are under pressure. CFO Steve Schmitt said rising input costs and a shifting product mix have hurt margins.
A tariff benefit in North American beverages also won’t repeat. Management expects commodity costs to keep climbing as hedges roll off.
The company plans to keep spending on advertising and marketing. It will also cut overhead and other costs to pay for it.
Executives warned of “a new wave of inflation.” They said revenue management tactics will help, which often means higher prices.
Laguarta said next year’s pricing will stay below 2025’s.
Analysts also asked about bigger changes, like splitting the business or selling brands. Laguarta said the company is open to revisiting every option.
For now, PepsiCo stock is caught between strong international sales and a slow U.S. turnaround. The next update comes in February, when PepsiCo will share its 2027 outlook.
Until then, PepsiCo stock will likely trade on whether North America can improve. Investors will also watch how rising costs hit margins.
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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!
