PepsiCo's Ongoing North America Weakness Drives Guidance Cut, Says Analyst
Shares of PepsiCo Inc (NASDAQ: PEP ) were down in early trading on Friday, even after the company reported upbeat third-quarter earnings. The company lowered its earnings outlook for fiscal 2026, which suggested its sales growth and productivity programs were insufficient to offset rising costs, according to TD Cowen. • PepsiCo stock is showing weakness. What’s pulling PEP shares down? The PepsiCo Rating: Analyst Robert Moskow reiterated a Hold rating and price target of $133. The PepsiCo Thesis: North America performed below expectations in the third quarter, which was the reason behind the guidance cut, Moskow said in the note. Check out other analyst stock ratings. After working for a year on affordability, management indicated Frito-Lay’s net pricing needs to increase in fiscal 2027, the analyst stated. This raised the likelihood of volume heading back into negative territory next year, "after barely getting above flat this year," he added. Management further indicated that initiatives would be taken to ensure pricing does not return to 2025 levels, which suggested the price hike would be less than 1% in fiscal 2027, Moskow noted. There was a lack of transparency around "what w
Shares of PepsiCo Inc (NASDAQ: PEP ) were down in early trading on Friday, even after the company reported upbeat third-quarter earnings. The company lowered its earnings outlook for fiscal 2026, which suggested its sales growth and productivity programs were insufficient to offset rising costs, according to TD Cowen. • PepsiCo stock is showing weakness. What’s pulling PEP shares down?
The PepsiCo Rating: Analyst Robert Moskow reiterated a Hold rating and price target of $133. The PepsiCo Thesis: North America performed below expectations in the third quarter, which was the reason behind the guidance cut, Moskow said in the note. Check out other analyst stock ratings. After working for a year on affordability, management indicated Frito-Lay’s net pricing needs to increase in fiscal 2027, the analyst stated.
This raised the likelihood of volume heading back into negative territory next year, "after barely getting above flat this year," he added. Management further indicated that initiatives would be taken to ensure pricing does not return to 2025 levels, which suggested the price hike would be less than 1% in fiscal 2027, Moskow noted. There was a lack of transparency around "what went wrong in North America and what changes they intend to put in place to address them," the analyst wrote.
See More: Top Growth Stocks If PepsiCo could accelerate North America growth while maintaining the strong momentum in its international business, as management aims, it would translate to organic sales growth above the fiscal 2026 guidance of around 3%, he stated. " He added that investors would watch evidence of any "sustainable improvement" before pricing in any meaningful acceleration. Management’s projections of commodity cost pressures continuing into fiscal 2027 created "another obstacle to earnings growth," the analyst further said. 93 at the time of publication on Friday.
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