JPMorgan downgraded PepsiCo to Neutral from Overweight and lowered its price target to $138 from $170, marking the second downgrade for the food and beverage giant this week. The bank said PepsiCo's North American turnaround has stalled while costs are rising. Analyst Andrea Teixeira told investors the upcoming quarter may still look decent, helped by strong international sales on favorable weather and the FIFA World Cup, but excluding those one-off boosts, North American trends have continued to fall short of management's expectations. Teixeira said PepsiCo will likely have to rely more heavily on cost savings in the fourth quarter to hit the low end of its guidance for 5% to 7% earnings growth, with new transportation costs expected to add pressure. JPMorgan cut its 2027 EPS estimate to $8.86 from $9.05 and its 2028 estimate to $9.33 from $9.57, both below the consensus of $8.95 and $9.47. On Monday, Deutsche Bank downgraded PepsiCo to Hold from Buy and cut its price target to $138 from $155, with analyst Steve Powers citing less certainty in the company's strategic direction in North America.
PepsiCo IncJPMorgan downgraded PepsiCo to Neutral and cut its price target to $138 from $170, citing stalled North American turnaround and rising costs.
Deutsche Bank Aktiengesellschaft
JPMorgan Chase & Co