Freedom Capital Markets downgrades Pepsico stock to Hold on limited upside

Investing.com - Freedom Capital Markets downgraded Pepsico (NASDAQ:PEP) from Buy to Hold and lowered its price target to $164.00 from $170.00, citing limited upside potential of about 7%. According to InvestingPro data, PepsiCo currently trades at a P/E ratio of 29.1x and maintains impressive gross profit margins of 54.7%.

The rating change follows Pepsico’s third-quarter fiscal 2025 results, which exceeded consensus estimates for both sales and earnings per share, triggering a rally in the stock price.

Revenue growth for the beverage and snack giant accelerated compared to the previous quarter, though it remains in the low single-digit range, according to Freedom Capital Markets.

Pepsico maintained its full-year revenue guidance following the earnings release and improved its EPS growth outlook for fiscal year 2025.

The company held an investor conference call to discuss the quarterly performance after releasing its financial results for the period.

In other recent news, PepsiCo reported third-quarter earnings that surpassed expectations, despite weaker organic revenue growth. The company managed to offset this with lower selling, general, and administrative expenses, along with favorable foreign exchange rates. Following these results, UBS raised its price target for PepsiCo to $172, maintaining a Buy rating, citing effective cost management. Similarly, Wells Fargo increased its price target to $154, while maintaining an Equal Weight rating, noting debates around sales growth and profit power. RBC Capital reiterated its Sector Perform rating with a $145 target, pointing out challenges in domestic top-line performance and some international softness.

In a separate development, Cyngn announced the deployment of its DriveMod Tugger autonomous vehicle technology at G&J Pepsi, marking an expansion into material handling for consumer-packaged goods. This partnership is part of Cyngn’s strategy to broaden the adoption of its autonomous technology across various industries. G&J Pepsi, the largest independent Pepsi bottler in the United States, will integrate this technology to automate material handling tasks within its facilities. These developments highlight ongoing strategic moves and analyst perspectives surrounding these companies.

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