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Investing.com - TD Cowen raised its price target on Pepsico (NASDAQ:PEP) to $155.00 from $140.00 on Wednesday, while maintaining a Hold rating on the stock. The beverage giant, currently trading at $150.28 with a market cap of $205.74B, maintains impressive gross profit margins of 54.68% and has raised its dividend for 52 consecutive years, according to InvestingPro data.
The price target increase follows activist investor Elliott Investment Management’s disclosure of a $4 billion stake in the beverage and snack giant, representing approximately 2% of the company.
Elliott has proposed several actions aimed at reaccelerating growth, improving margins, and boosting Pepsico’s valuation, according to TD Cowen’s research note.
TD Cowen views Elliott’s involvement as a positive development because it increases pressure on Pepsico’s management to accelerate its initiatives.
The research firm noted that, counterintuitively, Pepsico’s management will likely appreciate Elliott’s stated intention to collaborate rather than antagonize.
In other recent news, PepsiCo Inc. is set to increase its ownership in Celsius Holdings Inc. to 11% through a $585 million investment in convertible preferred stock. This deal will also involve Celsius acquiring PepsiCo’s Rockstar Energy brand in the US and Canada. Additionally, Alani Nu, recently acquired by Celsius, will transition to PepsiCo’s distribution network in both countries to expand its retail presence. Piper Sandler has reiterated an Overweight rating on PepsiCo stock, highlighting the company’s focus on innovation, despite cautious consumer behavior impacting certain segments. UBS also maintained a Buy rating on PepsiCo, citing growth potential after discussions with company executives following their second-quarter earnings report. Meanwhile, BofA Securities raised its price target for PepsiCo to $150 from $145, maintaining a Neutral rating, after the company’s quarterly performance exceeded expectations. PepsiCo’s improved earnings outlook for 2025 was attributed to reduced foreign exchange headwinds. These developments reflect ongoing strategic moves and analyst perspectives surrounding PepsiCo.
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