Asia FX cautious amid US govt shutdown; yen tumbles after Takaichi’s LDP win
Investing.com - TD Cowen has reiterated its Hold rating and $155.00 price target on Pepsico (NASDAQ:PEP) stock, currently trading at $143.34, following investor feedback on Elliott Investment Management’s value creation proposals. According to InvestingPro data, PepsiCo maintains impressive gross profit margins of 54.68% and has raised its dividend for 52 consecutive years.
The research firm surveyed 17 investors and found widespread skepticism about Elliott’s recommendations for the beverage and snack giant. Most investors viewed Elliott’s approach as either too friendly to drive meaningful change or focused on unlikely initiatives such as re-franchising bottling operations.
TD Cowen noted that investors recognized PepsiCo’s current valuation as "unusually compressed," particularly when compared to its closest competitor Coca-Cola. However, at least one long-term investor believed this valuation gap was justified by Coca-Cola’s successful franchisee model and potential structural headwinds facing the salty snacks category.
Despite the skepticism, TD Cowen expressed a slightly more positive outlook on Elliott’s proposals while acknowledging implementation challenges. The firm did not advocate for significant multiple expansion for PepsiCo shares.
TD Cowen suggested PepsiCo stock might regain momentum if earnings forecasts stabilize after recent downward revisions, even without major strategic changes.
In other recent news, PepsiCo has made significant financial moves, including increasing its stake in Celsius Holdings to 11% through a $585 million investment in convertible preferred stock. This development is accompanied by Celsius acquiring PepsiCo’s Rockstar Energy brand in the U.S. and Canada. In addition, Alani Nu, a female-focused energy drink recently acquired by Celsius, will be distributed by PepsiCo in both countries, potentially enhancing its retail presence. Meanwhile, analyst firms have been active in reassessing PepsiCo’s stock. TD Cowen raised its price target to $155, driven by activist investor Elliott Investment Management’s acquisition of a $4 billion stake, approximately 2% of the company. RBC Capital maintained its Sector Perform rating with a price target of $146, noting the emergence of activist involvement. Piper Sandler reiterated an Overweight rating with a $160 price target, citing PepsiCo’s focus on innovation despite cautious consumer behavior in the U.S. These developments highlight a dynamic period for PepsiCo, with strategic investments and varied analyst perspectives shaping the company’s outlook.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.