PepsiCo (NASDAQ:PEP) Stock Price Down 1.4% – What’s Next?

PepsiCo, Inc. (NASDAQ:PEP)’s share price dropped 1.4% on Tuesday. The stock traded as low as $132.50 and last traded at $133.50. Approximately 8,052,862 shares were traded during mid-day trading, a decline of 1% from the average daily volume of 8,149,752 shares. The stock had previously closed at $135.46.

Key Stories Impacting PepsiCo

Here are the key news stories impacting PepsiCo this week:

• Positive Sentiment: PepsiCo trades at roughly 17 times earnings—near its cheapest valuation in about six years—and offers a dividend yield above 4%. Analysts view the low valuation as compensation for near-term execution risks and a potential buying opportunity. PepsiCo valuation article
• Positive Sentiment: PepsiCo’s combination of beverages and snacks, international exposure and iconic brands is viewed as creating a more defensive business than a beverage-only competitor. Morningstar reportedly favors PEP’s recovery potential because of its cheaper valuation. PepsiCo versus Coca-Cola and Mondelez article
• Positive Sentiment: Management’s North American reset—focused on cost reductions, brand investment and new products—could restore growth. An activist investor’s involvement may add pressure to improve efficiency and shareholder returns. PepsiCo North America reset article
• Neutral Sentiment: Comparisons with Coca-Cola and Mondelez highlight PepsiCo’s broad portfolio and global reach, but also show that its margins, valuation and earnings trends must improve for the stock to outperform. PepsiCo versus Coca-Cola article
• Negative Sentiment: The main overhang is stagnant North American demand. PepsiCo has cut prices by as much as 15% to win back cost-conscious consumers, which could pressure margins and underscores the challenge of balancing volume growth with profitability. Why PepsiCo stock is falling article

Wall Street Analysts Forecast Growth

Several analysts recently weighed in on the company. Evercore dropped their price target on PepsiCo from $150.00 to $135.00 in a report on Wednesday, September 30th. Jefferies Financial Group restated a “hold” rating on shares of PepsiCo in a research note on Thursday, October 8th. Piper Sandler lowered their price target on shares of PepsiCo from $176.00 to $140.00 and set an “overweight” rating on the stock in a research report on Friday, October 9th. JPMorgan Chase & Co. dropped their price objective on shares of PepsiCo from $138.00 to $137.00 and set a “neutral” rating for the company in a research note on Friday, October 9th. Finally, Deutsche Bank Aktiengesellschaft reaffirmed a “hold” rating and set a $132.00 target price on shares of PepsiCo in a report on Friday, October 9th. One investment analyst has rated the stock with a Strong Buy rating, four have assigned a Buy rating, fourteen have issued a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat, PepsiCo has an average rating of “Hold” and a consensus target price of $143.28.

PepsiCo Trading Up 0.7%

The firm’s fifty day simple moving average is $133.76 and its 200 day simple moving average is $145.93. The stock has a market capitalization of $182.04 billion, a P/E ratio of 16.77, a price-to-earnings-growth ratio of 4.06 and a beta of 0.35. The company has a debt-to-equity ratio of 1.90, a quick ratio of 0.76 and a current ratio of 0.94.

PepsiCo (NASDAQ:PEP) last announced its quarterly earnings results on Wednesday, October 7th. The company reported $2.34 EPS for the quarter, beating analysts’ consensus estimates of $2.29 by $0.05. PepsiCo had a return on equity of 53.08% and a net margin of 11.09%. The company had revenue of $25.27 billion during the quarter, compared to analysts’ expectations of $24.95 billion. During the same period in the prior year, the company earned $2.29 EPS. PepsiCo’s revenue was up 5.6% compared to the same quarter last year. As a group, equities research analysts forecast that PepsiCo, Inc. will post 8.39 EPS for the current fiscal year.

Insiders Place Their Bets

In other news, CEO Ramon Laguarta sold 30,000 shares of the company’s stock in a transaction that occurred on Wednesday, October 21st. The stock was sold at an average price of $135.13, for a total value of $4,053,900.00. Following the completion of the transaction, the chief executive officer directly owned 491,645 shares of the company’s stock, valued at $66,435,988.85. This represents a 5.75% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at this hyperlink. Also, Director Robert Pohlad purchased 184,646 shares of the stock in a transaction dated Wednesday, October 14th. The stock was purchased at an average cost of $128.28 per share, for a total transaction of $23,686,388.88. Following the completion of the acquisition, the director owned 433,009 shares of the company’s stock, valued at approximately $55,546,394.52. This represents a 74.35% increase in their position. The disclosure for this purchase is available in the SEC filing. Corporate insiders own 0.12% of the company’s stock.

Hedge Funds Weigh In On PepsiCo

Several hedge funds have recently added to or reduced their stakes in the company. BlackRock Inc. increased its holdings in PepsiCo by 2.1% in the 2nd quarter. BlackRock Inc. now owns 118,281,854 shares of the company’s stock worth $16,015,363,000 after acquiring an additional 2,440,377 shares in the last quarter. State Street Corp raised its stake in PepsiCo by 1.7% in the 2nd quarter. State Street Corp now owns 60,406,932 shares of the company’s stock valued at $8,179,099,000 after purchasing an additional 987,582 shares during the last quarter. Bank of America Corp DE lifted its holdings in PepsiCo by 0.6% in the 1st quarter. Bank of America Corp DE now owns 21,283,701 shares of the company’s stock valued at $3,305,146,000 after purchasing an additional 133,325 shares in the last quarter. Amundi lifted its holdings in PepsiCo by 16.8% in the 1st quarter. Amundi now owns 11,444,671 shares of the company’s stock valued at $1,777,243,000 after purchasing an additional 1,647,506 shares in the last quarter. Finally, UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC boosted its stake in PepsiCo by 4.9% during the 2nd quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 11,817,684 shares of the company’s stock worth $1,600,114,000 after purchasing an additional 549,336 shares during the last quarter. 73.07% of the stock is currently owned by institutional investors.

About PepsiCo

PepsiCo, Inc (NASDAQ:PEP) is a global food and beverage company whose portfolio includes Pepsi-Cola, Mountain Dew, Gatorade, Lay’s, Doritos, Cheetos, Quaker, Tostitos, Fritos, and SodaStream. Its products span carbonated soft drinks, sports and energy beverages, bottled water, juices, convenient foods, snacks, and other packaged food offerings.

The company sells products through retail stores, restaurants, food-service providers, e-commerce platforms, and other distribution channels. PepsiCo serves consumers in North America and international markets across Latin America, Europe, Africa, the Middle East, and Asia-Pacific.