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On Wednesday, JPMorgan reiterated its Neutral rating on Pepsico (NASDAQ:PEP) shares, maintaining a $158.00 price target. According to InvestingPro analysis, PepsiCo is currently trading near its Fair Value. The firm’s commentary highlighted PepsiCo’s recent presentation at the Consumer Analyst Group of New York (CAGNY) conference, where the company discussed various aspects of its business strategy and performance.
PepsiCo’s presentation centered on its North American business execution, long-term investments in digitalization and end-to-end capabilities, and international growth opportunities for both snacks and beverages. JPMorgan noted that while temporary factors such as decreased at-home snack consumption, cautious spending by Hispanic consumers, high inflation, and political headlines have contributed to a slowdown in the U.S., improvements in category trends might take time to materialize.
The firm acknowledged PepsiCo’s management initiatives, including more aggressive revenue growth management with affordable pricing, better in-store execution, and an expanded out-of-home presence. These efforts are expected to yield long-term results, but JPMorgan does not anticipate seeing these reflected in financial outcomes until the second half of 2025.
For PepsiCo shares to experience a rebound, JPMorgan believes there needs to be a turnaround in market share for U.S. snacks, specifically in the Frito-Lay North America (FLNA) segment, and an upturn in the beverages business. The firm elaborated on topics discussed by CEO Ramon Laguarta, CFO Jamie Caulfield, and SVP of Investor Relations Ravi Pamnani during the conference.
Additionally, JPMorgan adjusted its estimates to account for foreign exchange headwinds and margin phasing, leading to a slight decrease in the 2025 earnings per share (EPS) forecast by $0.01 to $8.31. Despite this adjustment, the December 2025 price target for PepsiCo remains unchanged at $158, which is based on 18 times the projected 2026 EPS and is largely aligned with the valuations of multi-national peers, excluding companies like The Coca-Cola Company (NYSE:KO), Procter & Gamble (PG), and Colgate-Palmolive (NYSE:CL).
In other recent news, Procter & Gamble reported its second fiscal quarter earnings per share at $1.88, narrowly surpassing Wall Street’s estimates. The company’s organic revenue also exceeded expectations, benefiting from a recovery in certain segments. Despite these positive results, BNP Paribas (OTC:BNPQY) analyst Kevin Grundy expressed skepticism about Procter & Gamble’s fiscal 2025 organic sales guidance, citing market uncertainty in the United States. This has led to investor concerns, although Procter & Gamble maintains that it has ample flexibility to protect earnings per share if sales growth slows.
UBS reiterated a Buy rating with a $189 price target, highlighting the company’s sequential improvement in organic revenue and volume. Stifel and Goldman Sachs also adjusted their price targets to $165, maintaining Hold and Neutral ratings, respectively. Stifel noted improvements in Procter & Gamble’s performance in China and consistent growth in the United States. Goldman Sachs acknowledged the company’s strong execution despite a challenging market and expressed cautious optimism for the latter half of the fiscal year.
Procter & Gamble’s ability to navigate market volatility and maintain its growth trajectory continues to be closely monitored by investors and analysts alike.
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