Catch up on the essentials
- JPMorgan lowered its rating on PepsiCo to Neutral from Overweight and trimmed its price target to $138 from a previous $170, marking the second analyst downgrade of the food and beverage company within the same week.
- The JPMorgan move follows a separate cut earlier in the week from Deutsche Bank, which lowered PepsiCo to Hold from Buy and reduced its price target to $138 from $155.
- The same outlet reported that JPMorgan analysts said estimates will likely move further down, reinforcing the cautious stance on PepsiCo's near-term outlook.
Selected from this article · 2026-09-30
Read on for the full pictureJPMorgan's rating cut and price-target reduction
JPMorgan lowered its rating on PepsiCo to Neutral from Overweight and trimmed its price target to $138 from a previous $170, marking the second analyst downgrade of the food and beverage company within the same week. Analyst Andrea Teixeira wrote that the recovery in the Frito-Lay North America (FLNA) salty-snacks division has "stalled" and remains "lackluster," even after PepsiCo pursued ingredient reformulations, new packaging, increased spending and lower prices. JPMorgan also warned that rising expenses, including new transportation costs, will likely force PepsiCo to rely more heavily on cost-saving measures to reach the low end of its full-year guidance for 5% to 7% earnings growth, and reduced its earnings per share estimates, with the 2027 figure cut to $8.86 from $9.05 and the 2028 estimate lowered to $9.33 from $9.57, leaving both below consensus. "As estimates will likely move down from here, we expect investors to wait for expectations to be more realistic... before becoming more constructive again," Teixeira wrote.
Earlier downgrade from Deutsche Bank
The JPMorgan move follows a separate cut earlier in the week from Deutsche Bank, which lowered PepsiCo to Hold from Buy and reduced its price target to $138 from $155. Deutsche Bank analyst Steve Powers expressed "less certainty in PEP's strategic direction in North America," saying the company's turnaround initiatives have produced only "mixed or fleeting benefits."
Other developments
Separately, GuruFocus coverage framed the JPMorgan action as a roughly 19% price-target reduction ahead of PepsiCo's upcoming earnings report, noting that the stock was approaching its 52-week low as analysts anticipated weak results. The same outlet reported that JPMorgan analysts said estimates will likely move further down, reinforcing the cautious stance on PepsiCo's near-term outlook.
PepsiCo is next expected to report quarterly earnings, with investors watching for updates on the Frito-Lay North America business and any revised full-year guidance.
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