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Investing.com - Goldman Sachs has reiterated its Buy rating and $160.00 price target on Pepsico (NASDAQ:PEP) following the company’s second-quarter earnings results. According to InvestingPro data, PepsiCo, currently trading near its 52-week low of $127.60, maintains impressive gross profit margins of 55% and offers a 4.2% dividend yield.
Pepsico reported organic revenue growth of 2.1% for the quarter, exceeding both Goldman Sachs and consensus estimates of 1.4% and 1.5%, respectively. The company delivered earnings per share of $2.12, surpassing analyst expectations of $2.03. The beverage giant, with annual revenue of $91.5 billion, has shown consistent financial strength, maintaining dividend payments for 55 consecutive years.
The beverage and snack giant maintained its full-year guidance of low-single-digit percentage organic sales growth and approximately flat year-over-year foreign exchange neutral EPS growth. Pepsico now expects a more modest foreign exchange headwind of approximately 1.5 percentage points on reported net revenue and EPS growth, down from its previous estimate of 3 percentage points.
Based on the revised foreign exchange impact, Pepsico now projects core EPS growth of approximately -1.5%, implying a full-year EPS of about $8.04. This represents an improvement from the prior implied EPS of $7.92 and exceeds both Goldman Sachs and consensus estimates of $7.90 and $7.88, respectively.
Goldman Sachs noted that Pepsico’s better-than-feared Q2 results and healthy first-half topline performance should help alleviate investor concerns about the feasibility of management’s full-year guidance, particularly given the benefit of easier year-over-year comparisons in the third quarter. InvestingPro analysis suggests the stock is currently undervalued, with additional insights available in the comprehensive Pro Research Report, which covers this $185 billion market cap company among 1,400+ top US stocks.
In other recent news, PepsiCo reported second-quarter 2025 earnings that exceeded analyst expectations, with organic sales growth of 2.1% and earnings per share of $2.12, surpassing the consensus forecast of $2.03. The company also raised its all-in EPS guidance to approximately $8.04, above the consensus estimate of $7.88, due to lower foreign exchange headwinds. Citi reiterated its Buy rating on PepsiCo with a $160.00 price target, highlighting the strong performance in both North American and international segments. Meanwhile, UBS maintained its Buy rating and $169.00 price target, citing a favorable risk/reward profile despite challenges in North America. Conversely, BofA Securities lowered its price target to $145.00 due to concerns over North American sales, maintaining a Neutral rating. In a separate development, PepsiCo announced a partnership with Cargill to implement regenerative agriculture practices across 240,000 acres of Iowa farmland by 2030. This initiative aims to improve soil health and increase climate resilience, aligning with PepsiCo’s environmental goals. Additionally, former President Donald Trump claimed that Coca-Cola (NYSE:KO) agreed to use real cane sugar in its U.S. products, though no official confirmation from the company has been provided.
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