Pepsico stock price target raised to $172 by UBS on cost management

Investing.com - UBS raised its price target on Pepsico (NASDAQ:PEP) to $172.00 from $170.00 on Friday, maintaining a Buy rating following the company’s third-quarter earnings report. According to InvestingPro data, PepsiCo is currently trading near its Fair Value, with a market capitalization of $204.6 billion.

The beverage and snack giant reported quarterly results that exceeded expectations, with weaker organic revenue growth and gross margin offset by lower SG&A expenses, favorable foreign exchange rates, and other factors. Pepsico reiterated its full-year outlook for both top and bottom lines.

UBS noted that Pepsico’s results highlighted continued weakness in end market demand across many categories, with some areas showing further deterioration. The firm indicated this trend likely extends beyond Pepsico to affect much of the consumer products sector this quarter. Despite market challenges, PepsiCo remains a prominent player in the beverages industry, with annual revenue of $91.7 billion.

Investors continue to question when the North America business might return to consistent growth, with UBS suggesting that achieving 4%+ organic growth will require several quarters and progress will likely be gradual.

Despite these challenges, UBS expressed increased confidence in Pepsico’s strategy, noting "more tangible actions are being taken across both business in terms of innovation, investment, and cost cutting" that create "a more credible path to sequential improvement" compared to earlier in the year. For deeper insights into PepsiCo’s financial health, valuation metrics, and additional ProTips, access the comprehensive Pro Research Report available exclusively on InvestingPro.

In other recent news, PepsiCo reported better-than-expected earnings for the third quarter of 2025, with earnings per share at $2.29, surpassing the forecast of $2.26. Revenue also exceeded expectations, coming in at $23.94 billion compared to the anticipated $23.86 billion. Meanwhile, Wells Fargo raised its price target for PepsiCo to $154 from $150, while maintaining an Equal Weight rating. The adjustment was made amid discussions about the company’s sales growth and strong double-digit profit growth exiting Q4 2025. RBC Capital, on the other hand, reiterated its Sector Perform rating with a $145 price target, noting challenges in domestic top-line performance and some international softness. These developments highlight ongoing debates among analysts about PepsiCo’s growth trajectory.

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