Pepsico stock rating reiterated at Buy by UBS, citing growth potential

Published 22/07/2025, 15:50
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Investing.com - UBS has reiterated its Buy rating and $175.00 price target on Pepsico (NASDAQ:PEP), a prominent beverages industry player with 52 consecutive years of dividend raises, following a fireside chat with company executives. According to InvestingPro data, the company maintains a "Good" financial health score, with analysts’ price targets ranging from $115 to $175.

UBS analyst Peter Grom maintained the rating after discussions with Pepsico’s Executive Vice President and CFO Jamie Caulfield and Senior VP of Investor Relations Ravi Pamnani on Friday, following the company’s second-quarter earnings report.

The conversation focused on management’s confidence in returning the business to algorithm-aligned top and bottom line growth, with UBS noting that Pepsico is "on a much firmer trajectory today vs. what we have seen/heard over the last year."

UBS highlighted that while investors may wait for concrete signs of improved organic sales growth, the company shows potential for bottom line growth to reaccelerate to high single digits looking ahead to 2026.

The firm believes the risk/reward profile for Pepsico "is among the most attractive in the entire group," noting that shares are currently trading below historical averages.

In other recent news, PepsiCo reported its second-quarter earnings for 2025, surpassing Wall Street expectations. The company achieved an earnings per share (EPS) of $2.12, exceeding the forecasted $2.03, while its revenue reached $22.73 billion, surpassing the anticipated $22.25 billion. Following these results, BofA Securities raised its price target for PepsiCo to $150 from $145, maintaining a Neutral rating. This adjustment came after PepsiCo’s quarterly performance exceeded expectations and the company raised its full-year 2025 earnings outlook due to reduced foreign exchange headwinds. BofA Securities also increased its fiscal year 2025 earnings per share estimate to $8.04 from the previous $7.87. These developments reflect a positive trend in PepsiCo’s financial performance.

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